NAR Predicts Home Sales Will Jump 14% in 2026; Mortgage Rates to Ease to Roughly 6% Next Year
HOUSTON—Existing-home sales are projected to rebound, rising by approximately 14% in 2026, according to National Association of Realtors Chief Economist Lawrence Yun, who delivered his 2026 housing outlook on Nov. 14 during the Residential Economic Issues and Trends Forum at the NAR NXT, The Realtor Experience conference here.
Yun said the expected rebound reflects easing mortgage rates, continued job gains, and improving market stability after several challenging years. Home prices are forecast to increase by 4% next year, supported by steady demand and persistent supply shortages.
“Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.”
Mortgage rates are projected to decline modestly, averaging around 6% in 2026. Yun emphasized that while rates are influenced by more than Federal Reserve decisions alone, broader economic factors are contributing to gradually lower borrowing costs.
“As we go into next year, the mortgage rate will be a little bit better,” said Yun. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”
Buyers will see the greatest affordability improvements in regions where new housing supply is most robust, particularly high-construction markets like Houston. Expanding inventory in such areas will help more first-time buyers achieve homeownership.
“Houston is creating more home construction, and therefore making home prices much more reasonable,” said Yun. “Given the job creation, buyers will inevitably be showing up to Houston once the mortgage rate goes down.”
Jessica Lautz, NAR’s deputy chief economist and vice president of research, presented insights from the newly released 2025 Profile of Home Buyers and Sellers, highlighting how shifting demographics are reshaping today’s housing market.
Lautz noted that the typical age of a home buyer today is 59 and the typical age of a repeat buyer is 62. She also shared that the number one reason people move today is because they want to be closer to friends and family.
“I call this the grandbaby effect,” Lautz said. “This is a different type of buyer.”
In contrast, first-time buyers continue to face steep challenges, with the share of first-time buyers hitting an all-time low of 21% and the median first-time buyer age reaching 40.
The median first-time buyer age has risen sharply over the past three years. NAR reported in 2024 that the median first-time homebuyer age was 38, which was three years older than the median of 35 years of age the association reported a year earlier.
“The biggest struggle first-time buyers have is finding an affordable property, and many of them struggle to save for a down payment,” said Lautz. “The biggest source of pain that they are citing is high rent and student loan debt.”
Despite the affordability challenges, use of real estate agents remains strong among both buyers and sellers. Lautz shared that 88% of buyers and 91% of sellers used an agent or broker in their most recent transaction.
Lautz cited the value agents provide in “pricing the home competitively in a changing market, marketing that home, and finding a qualified buyer.”
