L
awrence Yun, chief economist at the National Association of Realtors (NAR), believes home sales could still increase slightly this year and potentially see double-digit growth next year if mortgage rates drop to 6%. At NAR's Forecast Summit, Yun predicted a 3% rise in home sales for 2025, down from his previous forecast of 6%, and a 14% jump in 2026 if mortgage rates trend lower. He used the NAR Market Statistics Dashboard to show that mortgage rates around 6% could lead to over half a million additional home sales.

    Economists also discussed the record-low share of first-time buyers, which accounts for just 24% of home sales due to affordability challenges. However, Yun remains optimistic about future growth, citing the stability of the housing market and the potential for business community investment if the stock market continues to hover around all-time highs.

    The NAR Market Statistics Dashboard estimates that home sales would increase by around 550,000 in 12-18 months if mortgage rates dropped to 6% and stayed there. This figure is based on households that can afford to buy at different mortgage rate levels and the share that would translate to home sales.

    First-time buyer challenges were also highlighted during the Forecast Summit, with NAR Deputy Chief Economist Jessica Lautz noting that encouraging first-time buyers to purchase in the off-season could improve their chances of success. Domestic migration trends indicate that the South remains a top destination due to strong labor markets and more affordable home prices.

    While Yun's forecast has been revised downward, he still expects higher home sales in 2025 and a significant increase in 2026 if mortgage rates come down. The housing market is considered stable, with high equity levels, low mortgage delinquency rates, and many households owning their homes outright.