A “Little Bit Better” Housing Market in 2026? Here’s What NAR’s Chief Economist Is Saying

A “Little Bit Better” Housing Market in 2026? Here’s What NAR’s Chief Economist Is Saying

I recently read an article on Homes.com by Moira Ritter and Caroline Broderick covering a keynote from Lawrence Yun, Chief Economist for the National Association of Realtors, at the NAR NXT conference in Houston. I’m using that article as a reference for this post, and I want to break down what it could mean for you if you’re thinking about buying or selling a home in the next couple of years.

Short version? 2025 looks flat… but 2026 might finally feel a little bit better for real estate.

The Big Picture: “The Shutdown Is Over” and the Market Is Waking Up

At the NAR NXT conference in Houston, Yun shared a more optimistic tone than we’ve heard in a while. With the recent 43-day government shutdown now behind us, he expects some of the stalled deals from that period to start moving forward again.

For 2025, Yun isn’t calling for a big rebound. In fact, he expects no real increase in existing home sales this year – basically a “holding pattern” market.

The real action, according to him, starts in 2026, when we should see measurable improvement in sales activity and a bit more breathing room for buyers.

Mortgage Rates: Not a Big Drop, But a Little Relief

One of the main reasons the market’s been so tight is simple: interest rates.

According to Yun’s forecast (as reported in the Homes.com article):

• The 30-year fixed mortgage rate is expected to average around 6.7% this year.

• In 2026, he projects that number could move toward 6.0%.

• He also expects the Federal Reserve to cut rates again in December and potentially two more times in 2026. Those cuts don’t directly set mortgage rates, but they influence the overall cost of borrowing and usually ripple through to housing.

His words were careful: he expects things to be just “a little bit better.”
Not a crash in rates, not a return to 3% money… but a modest decline that helps with affordability.

Important reality check: last year he also expected rates to end up around 6%, but they spent much of this year closer to 7%. Forecasts are helpful, not guarantees. So if you’re waiting for “perfect rates,” you might be waiting a very long time.

Home Prices: Slow and Steady, Not a Crash

The article cites national Homes.com data showing that home prices have been moving up modestly, with:

• A median home price of about $385,000 in October

• National prices up about 3% this year

• Yun’s forecast for another 4% increase next year

If that 4% growth plays out, it would add roughly $15,400 to that median price.

Yun’s take:

• No national price crash on the horizon

• Some markets may see temporary dips (like areas that had a big rush of pandemic demand and builder activity), but nationally prices are on “solid ground.”

Translation: waiting for some massive nationwide discount on home prices is probably not a winning strategy.

Home Sales: Pent-Up Demand Is Building

Here’s where it gets interesting.

According to Yun’s forecast:

• Existing home sales:

  • 2025: roughly 0% growth

  • 2026: about +14%

• New home sales:

  • 2025: about -2%

  • 2026: about +5%

So why the sudden improvement in 2026?

Because underneath the surface, demand is already there. Yun noted that mortgage applications have been consistently higher than last year, even though not all of those turn into closed loans. That tells us people want to buy — they’re just being held back by:

• Rates that feel a little too high

• Not enough inventory

• Tough affordability in many markets

Give buyers slightly lower rates and more homes to choose from, and that demand has room to show up as actual closed sales.

Will 2026 Feel “Normal”? Maybe Not Yet.

Some industry voices still think “normal” is further out. The article quoted Connecticut broker Anthony Lamacchia, who doesn’t expect a truly typical year — in terms of the number of sales — until around 2027. After that, he even predicts a big boom toward the end of the decade.

Whether you buy that exact timeline or not, the theme is clear: this is not a dead market; it’s a constrained market. The demand is there. Affordability and inventory are the choke points.

What This Means If You’re a Buyer

If you’re thinking about buying in the next 12–24 months, here’s how to read all this:

• Waiting for much cheaper prices? Nationally, that’s not what the experts are projecting.

• Waiting for dramatically lower rates? The forecast is for “a little bit better,” not a rewind to pandemic-era rates.

• Time may work against you on price if values keep grinding higher.

Your smartest move is to focus on:

• Getting your finances and pre-approval in order now

• Understanding your affordability range at today’s rates

• Looking for opportunities in your local market (motivated sellers, new construction incentives, buydowns, etc.)

What This Means If You’re a Seller

If you’re a homeowner considering selling:

• You’re probably sitting on solid equity, thanks to price growth over the last several years.

• Forecasts suggest continued appreciation, not a major downturn.

• A busier 2026 with 14% more existing home sales could mean more buyers actively shopping, especially if rates ease a bit.

The key is to:

• Price realistically for today’s conditions

• Present your home well (marketing still matters… a lot)

• Time your move correctly if you also need to buy your next place

Final Thoughts: Plan Now, Don’t React Later

Again, this blog is based on and referencing the Homes.com article summarizing Lawrence Yun’s 2025–2026 housing forecast from the NAR NXT conference. Forecasts will shift as new data comes in — that’s normal.

But the overall message right now is:

• 2025: probably flat, not flashy

• 2026: likely “a little bit better” — more sales, slightly lower rates, continued price growth

• Beyond that: potential for a very active market as pent-up demand finally gets released

If you’re thinking about making a move in 2026, the best thing you can do is start planning now instead of trying to time the market perfectly.

You control your:

• Budget

• Strategy

• Timing

• Negotiation

You don’t control interest rates or national trends — but you can use them to your advantage when you understand what’s coming.