NAR Economist Predicts 14% Increase in Home Sales Volume in 2026; Home Sale Prices to Rise 4%
WASHINGTON—A group of real estate economists predict modest improvement in most key metrics in the coming year, including home sales, mortgage rates and home selling prices.
Led by National Association of Realtors Chief Economist Lawrence Yun, the NAR’s virtual Real Estate Forecast Summit held on Dec. 9 featured mostly positive predictions for the residential real estate markets in 2026.
Yun related that existing residential home sales were down 0.1% by the end of November 2025, ensuring that 2025 will be the third straight year of subpar sales volume performance. New home sales were down 1.2% by the end of November. NAR expects existing home sales to be flat in 2025 as compared to a year earlier, while new home sales are expected to decline by 2% by the end of this year. Yun expects for-sale inventory to rise once again in 2026.
Yun related that home sales are currently at 75% of the activity posted prior to the COVID-19 pandemic. He also noted that in the five-year period from the first quarter of 2020 to the second quarter of 2025, home prices in New York State have risen a remarkable 59.4%.
In terms of anticipated rate cuts by the Federal Reserve, Yun expects the Fed to cut rates later today (Dec. 10) and will initiate two further rate cuts in 2026. However, those rate cuts will have a minimal impact on mortgage lending rates. The Mortgage Bankers Association reported today that the average 30-year conventional mortgage rate for the week ended Dec. 5 was 6.33%. NAR expects the mortgage rate to end 2026 at 6.0%.
While there are some market headwinds, including the impending U.S. Supreme Court decision on the legality of tariffs imposed by the Trump Administration and poor consumer sentiment, Yun predicts home prices will rise 4% in 2026 after increasing 3% this year. Job gains will also tick up from approximately 400,000 in 2025 to 1.3 million in 2026. The unemployment rate, however, will rise from 4.3% in 2025 to 4.5% next year.
“After three years of flat home sales, a solid double-digit percentage increase is expected in 2026,” Yun said. “In 2026, we expect higher inventory, modest improvements in affordability, and more accommodating monetary policy from the Federal Reserve will help more Americans buy their next home."
Realtor.com Chief Economist Danielle Hale said that Realtors should expect the market to move in a “more buyer-friendly environment” in 2026.
Hale related, “We expect a more balanced housing market in 2026, leaning slightly in buyers' favor compared with 2025, as modest improvements in affordability, driven by mortgage rate relief and slower home price growth, give incomes a bit more room to catch up.”
Robert Dietz, SVP & Chief Economist at the National Association of Home Builders, said NAHB is cautiously optimistic about the home building market with single-family construction starts expected to rise 1% in 2026, multifamily building projected to be flat next year and home remodeling activity rising 4% in the next 12 months.
He said an expected small improvement in housing affordability conditions will bolster the supply side of the housing market.
Both Realtor.com and NAR released respective reports on the hot markets entering 2026. NAR released its top 10 markets, while Realtor.com amassed a list of 100 hot markets. The following are their top 10 lists:
NAR’s 10 Top Housing Hot Spots for 2026
(in alphabetical order)
Charleston, SC
Charlotte, NC-SC
Columbus, OH
Indianapolis, IN
Jacksonville, FL
Minneapolis–St. Paul, MN–WI
Raleigh, NC
Richmond, VA
Salt Lake City, UT
Spokane, WA
Realtor.com Top 10 Housing Markets in 2026
Hartford-West Hartford-East Hartford, CT
Rochester, NY
Worcester, MA-CT
Toledo, OH
Providence-Warwick, RI-MA
Richmond, VA
Grand Rapids-WY-MI
Milwaukee-Waukesha-West Allis, WI
New Haven-Milford, CT
Pittsburgh, PA
