Real estate professionals have been waiting for signs of renewed momentum — and according to new projections from the National Association of Realtors® (NAR), 2026 may finally deliver the boost the market needs. As mortgage rates slowly ease and buyer demand strengthens, economists anticipate a meaningful rise in both home sales and price growth nationwide.
Sales Expected to Jump as Rates Improve
NAR Chief Economist Lawrence Yun predicts home sales will climb by as much as 14% in 2026, following a mostly flat 2025. New-home sales are also projected to increase by about 5% as builders continue adding inventory.
“Next year is really the year that we will see a measurable increase in sales,” Yun shared at the Residential Economic Issues and Trends Forum during this year’s NAR NXT event in Houston.
Despite the increase in activity, home prices are expected to remain stable and continue rising — with an estimated 4% price gain in 2026, supported by strong job growth and low inventory levels.
Signs of Early Momentum Are Already Emerging
Several indicators point toward a healthier market ahead:
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Mortgage applications are trending higher — up 31% from a year ago, according to the Mortgage Bankers Association.
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Job growth remains steady, supporting buyer confidence.
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Homebuilders are continuing to add needed supply.
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The recent 43-day government shutdown, which temporarily slowed some transactions, has ended.
Together, these conditions are laying the groundwork for a more active housing market.
Mortgage Rates: A Gradual Shift Toward Affordability
While higher interest rates have been a major hurdle for buyers over the last few years, shifts are beginning to occur. The 30-year fixed mortgage rate, which hovered around 7% early in the year, recently averaged 6.24%, according to Freddie Mac.
Yun expects continued — though modest — improvement heading into 2026, with rates potentially averaging around 6%. While the return of 3% rates is highly unlikely, even small decreases can unlock significant buyer activity by improving affordability.
A Market Split Between “Haves” and “Have-Nots”
Today’s housing landscape remains uneven. Higher-end homes — especially those priced between $750,000 and $1 million — have seen stronger activity, supported by robust inventory and financial stability among buyers.
Lower-priced markets, however, remain tight due to ongoing inventory shortages.
NAR Deputy Chief Economist Jessica Lautz highlighted the growing divide between buyers with existing home equity and those striving to purchase their first home. First-time buyers have fallen to 21% of the market, far below the traditional 40% average. Many face obstacles such as rising rents, student debt, and childcare expenses.
Expanded financial education and awareness of down payment assistance programs could help younger buyers gain better access to the market.
Pricing Trends: The Return of Strategic Adjustments
As seasonal slowdowns settle in, sellers are experiencing longer days on market — and often, the need for price adjustments.
Yun noted that homes sitting longer tend to see larger reductions:
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0–14 days: 4.9%
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15–30 days: 6.1%
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31–60 days: 7.3%
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61–90 days: 9.0%
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91–120 days: 10.6%
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Over 120 days: 13.8%
These shifts reflect a return to more traditional pricing strategies — and don’t indicate a weakening market. Temporary dips may occur in areas experiencing rapid inventory growth, but nationally, prices are expected to continue rising.
Looking Ahead: Why 2026 Is Positioned for a Comeback
Despite conversations around foreclosures and market uncertainty, the fundamentals of the housing market remain strong:
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Mortgage delinquencies are historically low.
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Homeowners hold significant equity.
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Job growth continues steadily.
While 2025 brought slow, stagnant conditions, the stage is set for real improvement in 2026. With rising sales, modest rate relief, and steady price appreciation, both buyers and sellers may find new opportunities in the year ahead.