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awrence Yun, NAR’s chief economist, announced at the Residential Economic Issues & Trends Forum that 2026 could bring a 14 % jump in nationwide home sales, following a flat 2025. New‑home sales are expected to climb 5 %. “Next year is when we’ll see a measurable uptick,” Yun told attendees in Houston. Prices are projected to rise 4 % in 2026, buoyed by job growth and ongoing supply shortages, with no risk of a nationwide decline.
Early indicators point to a rebound. Mortgage applications are consistently above last year, rising 31 % YoY in the most recent week, according to the Mortgage Bankers Association. Job gains remain steady, builders are adding inventory, and the 43‑day government shutdown that stalled some sales has ended. Mortgage rates, a major buyer constraint, averaged 6.24 % this week after hovering near 7 % at the year’s start. Yun expects a modest decline, with rates averaging about 6 % in 2026 versus roughly 6.7 % this year. While the Fed has cut rates, Yun cautions that mortgage rates depend on inflation, Treasury yields, and federal borrowing, so a 3 % rate is unlikely. Even small reductions could spur significant buyer activity.
The market remains uneven. Upper‑end segments, especially the $750 k–$1 M range, have seen the largest gains, driven by ample inventory and strong financial markets. Lower‑price points still face tight supply. Jessica Lautz, NAR’s deputy chief economist, highlighted a widening gap: first‑time buyers now represent only 21 % of sales, down from a typical 40 %, and their median age is 40. They struggle with high rent, student debt, and childcare costs. Better financial education on down‑payment assistance and programs like FHA could help. Repeat buyers, particularly baby boomers, dominate the market, often using cash or equity gains.
Price adjustments are becoming more common as listings linger. Yun shared average price cuts by days on market: 0–14 days: 4.9 %; 15–30 days: 6.1 %; 31–60 days: 7.3 %; 61–90 days: 9 %; 91–120 days: 10.6 %; over 120 days: 13.8 %. Temporary dips may appear in local markets with rapid inventory growth, but Yun views them as short‑term. Nationally, a median 4 % price gain is expected in 2026 after a 3 % rise in 2025.
Despite concerns about rising foreclosures, fundamentals remain solid. Mortgage delinquencies are at historic lows, homeowners hold substantial equity, and job growth continues. While 2025 was largely stagnant, Yun believes the conditions for a meaningful recovery are aligning for 2026.
