Heat pump or central AC + furnace — which is better in 2026?

For most US homeowners in 2026, heat pump wins on total cost of ownership even without the federal 25C credit (it expired Dec 31, 2025). Modern cold-climate heat pumps (Mitsubishi Hyperheat, Daikin VRV, Bosch IDS) maintain 100% rated capacity down to 5°F and 70–80% capacity below -10°F, so they're a viable single-system replacement in all but the coldest northern climates. Stack state credits + utility rebates ($1,500–$4,000 in MA/CT/RI/NY/CA) + HEEHRA $8K for income-qualified households and a heat-pump conversion often costs less net than a like-for-like AC + furnace.