A major real estate organization is predicting that the housing market will see a major bounce back next year after a stagnant 2025.
The National Association of Realtors released a forecast predicting that in 2026 home sales will increase by 14 percent.
“I expect meaningfully higher home sales after three years of subpar performance, and a sales gain of 14 percent – our projection – means more Americans will be on the move,” Lawrence Yun, the association's chief economist, told Newsweek.
He said the forecast was driven by an increase in home inventory — available homes — and from "modestly lower mortgage rates." The association expects mortgage rates to drop to 6 percent next year, which would open the market to an estimated 5.5 million additional qualified homebuyers, which includes approximately 1.6 million renters. The current mortgage rate for a 30-year fixed loan is between 6.2 and 6.3 percent.
The NAR wrote that the market conditions are what the “real estate industry and potential homebuyers and sellers have been waiting for, following three years of stagnation.”
Other forecasts are more neutral on 2026's housing market. Zillow's latest forecast predicts only modest growth for home prices, rising just 1.2 percent next year.
Redfin issued a similar report, expecting only a 1 percent year-over-year growth.
Both forecasts suggest that the market is slowing, but not reversing course.
In either case, one of the most substantive factors for prospective home buyers is location.
States with the most active housing inventory increases over the last year include Maryland (34 percent increase), Virginia (27 percent increase) and North Carolina (34 percent increase) as well as Nevada (27 percent increase) and Arizona (23 percent increase), according to a Resi Club real estate analysis published in Fast Company. Washington saw a 25 percent inventory increase and South Dakota reported a 23 percent increase.
The current market appears to be moving in opposite directions based on regional housing availability. Softening prices — and even some price decreases — have been noted in markets where the active homes on the market exceed the number of homes on the market in 2019, Fast Company reports.
Most states that have more housing inventory today than in 2019 — before the pandemic drove some living in dense cities into less populated parts of the country — are in the west.
Texas, Arizona, Colorado, Utah, Idaho, Washington, Tennessee, Florida and Washington, D.C. have more homes on the market today than in 2019. Because of the available homes, prices in those places are cooling.
But in the Northeast and the Midwest, a different story is playing out. There are fewer homes on the market in those states compared to 2019, and their prices have remained high, even gaining value in some cases.
