Trends in the U.S. Real Estate Market 2026: Cautious Recovery and New Benchmarks – PwC

The U.S. property market enters 2026 in conditions of high uncertainty, described by PwC experts in their report as a “fog”. After the asset repricing cycle caused by higher interest rates, the market is adapting to a new reality – with expensive capital, high development costs, and a different structure of demand.

Business Confidence Index

PwC reports growing business confidence: the Emerging Trends Barometer reached 3.74 – the highest level in twenty years. According to a survey of more than 1,250 market participants, 55% expect “good” or “excellent” results for their companies in 2026, compared to 65% a year earlier. Among key macroeconomic factors are lending rates (87.4% of respondents named them decisive), income and employment growth (68.3%), and inflation (49.4%).



The industry is learning to build strategies under changing conditions. One respondent explained: “This is a curious time for real estate – there is so much uncertainty yet a strong desire to make deals. Today’s market does not reflect where we are heading.”

The main challenges for U.S. real estate in 2026 will be high labor costs and limited workforce availability – 73.5% of participants pointed to this factor. Next come pressure from local and state regulators (56.3%) and rising operating costs (50.7%). These indicators form the bulk of developers’ and property owners’ expenses.

In the socio-political block, immigration policy ranks first – named significant by 58.8% of respondents. Almost as many (50.8%) pointed to rising housing costs and shortages, while 36.2% cited growing political extremism. Together these trends create an unstable background for long-term planning.

Capital Market: Cautious Rebound

The U.S. capital market is showing signs of stabilization after a period of elevated rates. In the first half of 2025, the volume of investment deals rose 16% year-on-year to 221 billion dollars. The average quarterly figure reached 112 billion — close to historical values. Most of the growth came from residential assets, with activity at its highest in two decades. Industrial and office segments follow.



PwC forecasts moderate improvement in financing conditions in 2026. The liquidity index for key capital sources ranges from 3.06 to 3.44 on the PwC scale, reflecting gradual easing. The strongest increase is expected from GSEs and institutional investors, while non-bank lenders show moderate decline.

There is a shift in perception of credit policy: the share of respondents expecting tighter conditions fell from 33% to 25%. More than half believe financing terms will remain unchanged, and almost a quarter expect easing – for the first time in three years. PwC data is consistent with underwriting dynamics: after peaking in 2021–2022, the market is slowly returning to balance.



Most respondents (58%) expect lower commercial mortgage rates already in 2026, and about a third at least expect stability. The report defines the current situation as a “market of expectations”: liquidity is returning, but decisions are cautious, and competition for safe assets is intensifying.

From Niche Sectors to Core Segments

Over the past decade, the structure of the U.S. real estate market has shifted: capital is moving away from offices and shopping centers into infrastructure-driven sectors. The strongest investment growth is seen in warehouses (+20.2%), biotech R&D facilities (+3.4%), and industrial assets (+2.5%). The share of self-storage increased by 2.2%.



Senior housing is becoming one of the most stable income sources due to demographic aging, while medical offices remain resilient thanks to long lease terms and demand for outpatient services. Data centers are turning into the core of the digital economy: amid AI expansion, capital flows into this segment are accelerating.

New niches are emerging in parallel: educational, sports, and infrastructure real estate, as well as marinas and yacht storage. What seemed experimental just recently is becoming part of a sustainable investment landscape.

Market Outlook and Adaptation

In 2026 and the following five years, no dramatic volatility is expected, yet a gradual shift in trends is likely. More than half of respondents (58.4%) expect a decline in commercial mortgage rates already in 2026, while 59.8% project this over a longer horizon. Almost a third (31.6%) consider rate stability the most realistic scenario.

Investment return expectations remain restrained: 51.5% expect lower profitability, 33.4% stable performance, and only 14% foresee growth. A similar picture applies to inflation: 39% believe it will remain unchanged, 17.8% expect easing. Good or excellent prospects are cited by 55% of respondents – compared to 65% a year earlier – while moderate assessments are rising.





In the coming years, the market will prioritize asset quality and management efficiency. Investors are shifting from broad strategies to localized asset-level evaluation – down to individual submarkets and neighborhoods. This approach enables stable income models even amid fluctuating inflation and rates. PwC emphasizes that the coming years will be a period of adaptation rather than rapid growth.

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