“You have the Democrats who have seemed to have found the lane arguing this affordability concept,” Hornik said. “You had the Democrats sweep in New York City, the New Jersey governorship, and Virginia, so that’s going to overlay everything going on.”
Another major moment in 2025 was the government shutdown, which was the longest in US history. While it was finally resolved, it was only pushed ahead until January. Another shutdown could be coming in January, potentially impacting the spring homebuying season if consumers are hesitant amid the uncertainty.
The Federal Reserve will see changes in the first half of 2026. There will likely be a new Fed chair, as Jerome Powell’s term as chair ends in May. The next Fed chair will likely try to lower rates, but Hornik warns that could come at the cost of increased inflation.
“You’re going to have a new Fed chair who is going to be aligned with the President’s philosophy, lower rates, lower rates, lower rates,” Hornik said. “So that’s going to happen. And then you’re going to see how the economy, how the public responds to the stickiness of inflation, and how it remains higher.
“I got a lot of friends, people who I work with, and I know that they say they’re choosing not to go out to eat now. They’re going to the grocery store, and they’re choosing less expensive brands. Now, usually that’s not something they do, but they’re feeling it, so salaries aren’t keeping up with prices, which is something we’re going to have to get our hands around.”
