Housing Market Set for a 2026 Comeback

Real estate experts are anticipating a long-awaited upswing in market activity as we approach 2026, with national home sales positioned for what could be a strong double-digit expansion. According to Lawrence Yun, Chief Economist for the National Association of REALTORS®, sales across the country could climb by approximately 14% in 2026, marking a welcome shift after the relatively flat performance seen throughout 2025. The new-construction segment is also expected to show vitality, with projections pointing to a 5% increase next year.

Speaking at the Residential Economic Issues and Trends Forum during NAR NXT, The REALTOR® Experience in Houston, Yun emphasized that 2026 is shaping up to be the year when real, measurable growth returns to the market.

Importantly, this renewed momentum is not expected to undermine price stability. Yun affirmed that national home prices remain secure, with no indication of downward pressure. In fact, NAR forecasts values to advance by roughly 4% in 2026, supported by healthy employment trends and the continued scarcity of available inventory.

Early Market Acceleration: Employment Strength, Buyer Interest, and Builder Confidence

The first signs of a housing-market resurgence may already be taking shape. According to Yun, mortgage activity is climbing, the job market continues to show solid expansion, builders are steadily increasing new inventory, and the conclusion of the unprecedented 43-day government shutdown has removed a major obstacle that likely slowed some recent transactions.

“Mortgage applications have consistently outpaced last year’s levels, signaling a sustained and growing appetite among buyers,” Yun noted. In fact, the Mortgage Bankers Association reports that applications for home purchases jumped 31% year over year in the most recent week—clear evidence of renewed consumer confidence and rising demand.

Mortgage Rates: Easing Gradually, Opening the Door for More Buyers

Mortgage rates continue to be one of the primary hurdles for today’s purchasers. After starting the year near 7%, the average 30-year fixed rate has eased to 6.24%, according to the latest data from Freddie Mac.

Yun anticipates a slow but steady improvement moving forward. “As we move into next year, we should see slightly more favorable mortgage rates,” he said. While the shift won’t be dramatic, even a modest reduction can meaningfully enhance affordability.

His outlook places the average rate around 6% in 2026, down from approximately 6.7% for the current year.

Although the Federal Reserve has begun trimming rates, Yun emphasized that mortgage pricing responds to a broad constellation of economic indicators—ranging from inflation trends to Treasury yields and federal borrowing levels—so a return to the ultra-low 3% era is highly unlikely. Still, he noted that even small declines can ignite significant buyer momentum, especially in markets where demand is waiting for the right moment to re-enter.

A Divided Landscape: Strength at the Top, Barriers at the Entry Level

As momentum builds toward a potential 2026 recovery, it’s clear that not every corner of the housing market is experiencing the same trajectory. Today’s environment remains sharply uneven.

According to Yun, the upper-tier segment continues to outperform, supported by healthier inventory levels and the resilience of financial markets. Properties priced between $750,000 and $1 million have recorded some of the most notable growth. In contrast, availability at more affordable price points remains tight, limiting options for budget-conscious buyers.

During the same session, NAR Deputy Chief Economist Jessica Lautz highlighted an expanding divide between households with existing home equity and those still trying to enter the market for the first time.

“We’re seeing a true split between the haves and the have-nots,” she observed. “First-time buyers are finding it increasingly difficult to gain a foothold, while current homeowners continue to benefit from rising equity and stronger credit profiles.”

NAR’s newly published 2025 Profile of Home Buyers and Sellers shows first-time buyers falling to an unprecedented 21%, far from their historical 40% share. Their median age has climbed to 40, underscoring how much longer it now takes to reach homeownership.

Lautz stressed that younger adults still view owning a home as a key life milestone, but the barriers remain significant—ranging from elevated rents to student loan burdens and childcare expenses. Expanding financial education and increasing awareness of resources such as down payment assistance and FHA-backed loans could help bridge the gap, she noted.

Meanwhile, repeat buyers—especially baby boomers—are shaping much of today’s market activity, often leveraging strong equity positions or purchasing with cash, giving them a considerable advantage in competitive environments.

Price Adjustments Reemerge as Days on Market Increase

As the seasonal market cooldown takes hold, sellers are being reminded of the critical role that accurate pricing plays in achieving a timely sale.

Yun noted that, in many cases, a strategic price adjustment becomes necessary to re-engage buyers. “When a property remains on the market for an extended period, a reduction is often what’s needed to generate renewed interest,” he explained.

Recent MLS data confirms a growing trend of price cuts, typically tied to how long a listing has been active. Yun outlined the average reductions sellers make based on days on market:

• 0–14 days: 4.9% reduction
• 15–30 days: 6.1% reduction
• 31–60 days: 7.3% reduction
• 61–90 days: 9% reduction
• 91–120 days: 10.6% reduction
• More than 120 days: 13.8% reduction

Yun noted that while certain local markets may experience temporary price softening—often due to a sudden increase in inventory—these shifts tend to be short-lived. On a national level, he projects a 4% median home-price increase in 2026, following an estimated 3% rise in 2025.

Employment Strength, Inventory Movement and What Lies Ahead for 2026

While conversations about a slight uptick in foreclosures have surfaced, Yun emphasized that the core health of the housing market remains exceptionally strong. Mortgage delinquencies are sitting near record lows, homeowners continue to benefit from significant equity gains, and the job market is still expanding at a steady, reassuring pace.

Although 2025 delivered a largely flat performance, Yun believes the elements necessary for a substantial housing rebound in 2026 are steadily aligning. From economic stability to fortified homeowner equity positions, the foundation for a more dynamic and active market appears to be firmly in place.

Conclusion: A Market Poised for Renewal

As the industry moves toward 2026, a clearer picture is emerging—one defined by improving affordability, strengthening economic fundamentals, and renewed buyer enthusiasm. While the market continues to show pockets of imbalance, especially between established homeowners and those striving to enter for the first time, the broader indicators point toward a year of meaningful revitalization. Gradually easing mortgage rates, resilient job growth, rising inventory at key price points, and sustained home-price stability all signal a healthier landscape ahead.

At SPiRALNY, we remain committed to guiding our clients through these shifts with expertise, clarity, and a deep understanding of New York’s ever-evolving luxury market. Whether you’re preparing to buy, sell, or reinvest, 2026 is shaping up to offer fresh opportunities—and we’re here to help you navigate every step with confidence.