The National Association of REALTORS® (NAR) predicts that 2026 will be a “comeback year” for the U.S. housing market. According to NAR Chief Economist Lawrence Yun, the market is finally moving away from the stagnation of recent years toward a period of renewed activity and significant sales growth.
1. Major Sales Growth on the Horizon
- Existing-Home Sales: Forecasted to jump 14% nationwide in 2026.
- New-Home Sales: Expected to rise by 5% as builders continue to add supply.
- The Outlook: Yun notes that 2026 will likely be the first year in several years to see a “measurable increase” in transaction volume.
2. Mortgage Rates & Affordability
While we won’t see a return to the 3% rates of the past, a gradual downward trend is expected to help buyers:
- Projected Rates: Mortgage rates are expected to average around 6% in 2026, down from the 6.7% average seen in 2024.
- Buyer Sentiment: Even modest declines are expected to unlock pent-up demand. Recent data shows mortgage applications for home purchases have already surged 31% compared to last year.
3. Home Prices and Inventory Stability
Despite increased activity, home prices are not expected to drop. In fact, NAR expects a 4% national price increase in 2026. This stability is driven by:
- Steady job growth.
- A persistent shortage of inventory, particularly at lower price points.
NAR Nationwide Forecast: 2025 vs. 2026
| Metric | 2025 (Estimated) | 2026 (Forecast) |
|---|---|---|
| Existing-Home Sales Growth | Stagnant (~0%) | +14% |
| New Home Sales Growth | -2% | +5% |
| Median Home Price Growth | +3% | +4% |
| Average Mortgage Rate (30-yr fixed) | ~6.7% | ~6.0% |
| Job Gains | 400,000 | 1.3 Million |
| Unemployment Rate | 4.3% | 4.4% |
4. A Market of “Haves and Have-Nots”
The current market landscape shows a widening gap between different buyer demographics:
- First-Time Buyers: This group has dropped to an all-time low of 21% of the market (well below the 40% historical norm), with a median buyer age of 40.
- Repeat Buyers: Baby boomers and homeowners with significant equity are currently dominating, often using cash or large down payments to navigate the market.
5. The Importance of Pricing Strategy
As the market rebalances, sellers must be more strategic. Data shows that homes sitting on the market require progressively larger price cuts to attract buyers:
- 0–14 days: 4.9% average price cut
- 31–60 days: 7.3% average price cut
- Over 120 days: 13.8% average price cut
The Bottom Line
While 2025 may remain somewhat stagnant, the housing market’s fundamentals—including low delinquency rates and high homeowner equity—suggest that the conditions for a meaningful recovery in 2026 are firmly falling into place.
Source: Summary based on report by the National Association of REALTORS®.