Although some may be uncertain about how things will shake out for the real estate industry in 2026, the National Association of Realtors’ (NAR) chief economist Lawrence Yun is one person airing on the side of optimism.
In 2026, Yun said he is expecting existing home sales to rise 14% year-over-year, which he is attributing to easing mortgage rates, continued job gains and improving market stability.
“Next year is really the year that we will see a measurable increase in sales,” Yun said during the Residential Economic Issues and Trends Forum at NAR’s 2025 NXT conference in Houston on Friday. “Home prices nationwide are in no danger of declining.”
Yun is forecasting that home prices will jump 4% annually in 2026, due to steady demand and persistent low housing inventory.
For Yun, the path to this stronger 2026 is being paved by the recent reopening of the government.
“I bet you will see more activity based on what has happened in the past reopening of the government shutdown situation,” Yun said.
The reopening of the government means the release of delayed jobs data, and while inflation still remains above the level the Federal Reserve would like to see, Yun believes that as long as jobs data remains weak, there is a decent chance of the Fed cutting interest rates at its December meeting.
“I would say they will make a cut in December and probably two more next year,” Yun said.
These cuts will, of course, have an impact on prospective homebuyers struggling with affordability, as Yun said he expects to see mortgage rates decline slightly due to the rate cuts.
“As we go into next year, the mortgage rate will be a little bit better,” said Yun. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”