Existing-home sales are on track to climb roughly 14% in 2026, marking a long-awaited turning point for a market that has weathered years of rising borrowing costs and tight inventory, according to National Association of Realtors Chief Economist Lawrence Yun.
Lawrence Yun
Yun said the anticipated upswing is being driven by gradually improving mortgage rates, steady employment growth, and broadening market stability. Home prices are expected to rise about 4% next year, supported by resilient demand and persistent supply constraints that continue to define much of the country.
“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, which hit two-decade highs in 2023, are projected to edge down to an average of around 6% in 2026. Yun cautioned that rate movement is influenced by a wider set of economic forces, not merely Federal Reserve policy, but said the direction of travel points toward slightly improved affordability.
“As we go into next year, the mortgage rate will be a little bit better,” he said. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”
Markets with robust new construction are likely to see the biggest improvement for cost-burdened buyers. Yun pointed to Houston–one of the nation’s busiest homebuilding metros–as a standout example of how adding supply can moderate price pressures.
“Houston is creating more home construction, and therefore making home prices much more reasonable,” Yun said. “Given the job creation, buyers will inevitably be showing up to Houston once the mortgage rate goes down.”
Alongside the market outlook, Jessica Lautz, NAR’s deputy chief economist and vice president of research, presented findings from the organization’s newly released 2025 Profile of Home Buyers and Sellers, highlighting how shifting demographics are reshaping the landscape.
The typical home buyer today is 59 years old, while the average repeat buyer is 62–both record highs. Lautz said the dominant reason Americans move today is to be closer to family and friends.
“I call this the grandbaby effect,” she said. “This is a different type of buyer.”
First-time buyers, by contrast, remain under intense pressure. Their share of the market has slipped to a record low of 21%, and the median age for first-time purchasers has climbed to 40. High rents, limited inventory, and the weight of student loan debt remain major obstacles.
“The biggest struggle first-time buyers have is finding an affordable property, and many of them struggle to save for a down payment,” Lautz said. “The biggest source of pain that they are citing is high rent and student loan debt.”
Despite the challenging environment, consumer reliance on real estate agents has not diminished. Lautz said 88% of buyers and 91% of sellers used an agent or broker in their most recent transaction–figures she described as evidence of the value professionals continue to provide.
Agents remain essential, she said, in “pricing the home competitively in a changing market, marketing that home, and finding a qualified buyer.”
