2026 Housing Market Set for Big Rebound Article originally posted on Globe St. on November 19, 2025 Home sellers and buyers may be in for a happier year in 2026 if the predictions of Lawrence Yun, chief economist of the National Association of Realtors (NAR), pan out. Yun’s predictions include a 14% boost for existing home sales, and a 5% rise in new home sales. The improvement will be backed by a 4% increase in home prices and a dip in interest rates from 6.7% to 6% that will improve affordability. Continued job gains – 1.3 million more were predicted for 2026 — and a return to more stable market conditions that encourages demand will also help. According to Yun, 4.06 million homes were sold in September 2025 at a median sales price of $415,200 – an increase of 2.1% year-over-year. There were 1.55 million homes still on the market and supply rose from 4 months in September 2024 to 4.6 months in September 2025. Another positive sign was that mortgage applications have already risen by 31% year over year, as reported by the Mortgage Bankers Association, though applications for new homes fell slightly in October. The South had the highest level of existing home sales (46%), followed by the Midwest (23%), the West (19%) and the Northeast (12%). Regions where housing supply is greatest can expect the greatest improvement in sales –especially in markets where there has been a high level of new construction and significant job creation that attracts new residents, Yun said. He cited Houston as one example of such a market. “Expanding inventory in such areas will help more first-time home buyers achieve homeownership,” he commented. However, Yun also pointed to a widening gap between wealthy homebuyers and those in lower income groups. A chart showing the percent annual change in sales by price range demonstrated the point. There was a 9.7% annual increase in the number of homes sold for $250,000 to $500,000, a 10.6% increase in homes sold for $500,000 to $750,000, a 14.4% increase in homes sold for $750,000 to $1 million – and a 20.2% spike in the number of homes sold for more than $1 million. First-time homebuyers face particular difficulties, representing just 21% of the market with a median age of 40. “First-time home buyers are really struggling to get in, while those who have housing equity are building credit,” commented NAR’s deputy chief economist Jessica Lautz. She noted other challenges that young adults must deal with, like high rents, student loan debt and childcare costs. Furthermore, despite the outlook for rising home prices, Yun pointed out that sellers have to price correctly to sell a home and may have to lower their prices. The sooner they do so, the less they may lose. For example, a house that has been on the market for less than 14 days may have to accept a 4.9% lower price while a home that is still on sale after three to six months may face a 10.6% cut. Longer than that and the cut may be 13.8%. Meanwhile, mortgage delinquencies remain at historical lows, and existing homeowners hold substantial equity. “Home prices nationwide are in no danger of declining,” Yum said.