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NAR Forecast: Lawrence Yun's 2026 housing prediction
The headline: the National Association of Realtors chief economist expects a stronger 2026. The main numbers to remember are a projected 14 percent rise in existing home sales
and roughly 4 percent nationwide price growth. Those gains are tied to three things: modestly easing mortgage rates, continued job gains, and improving market stability.
A 14 percent sales jump sounds lofty, but think of it this way: sales respond faster than prices when affordability improves even a little. If borrowing costs drift lower and more sidelined buyers return, volume can move quickly even if price appreciation is measured. Yun’s take is not wild optimism; he expects modest improvements that change the game for buyers who were priced out this year.
Why Yun believes prices are safe from collapse
Yun argues that low housing inventory and steady demand create a cushion against dramatic price declines. Inventory is the single biggest factor that controls how big any correction can be: when supply is tight, prices have less room to fall. That said, the national picture mixes pockets of weakness with pockets of strength, so "no danger of nationwide collapse" is a statement about scale, not uniformity.
Why mortgage rates, Fed policy, and jobs data often move housing
The connection between the Fed and mortgage rates is important to get right. The Fed sets the federal funds rate, not mortgage rates directly. Mortgage pricing follows the bond market, which anticipates Fed moves. If jobs data softens, markets can start pricing rate cuts before the Fed acts — and mortgage rates can fall as a result.
Yun expects a modest sequence of rate cuts — one in December followed by perhaps two more next year — and he expects that to translate into slightly lower mortgage rates. Slight is the key word: these are not 2 percentage-point moves from 6.3 down to 4 percent overnight. Modest declines, though, can make monthly payments more affordable for many buyers and unlock demand from those who have been sidelined.
The bearish case: headlines, clickbait, and real risk
The more dramatic view predicts a severe correction, in some versions a drop up to 50 percent in some headlines. That scenario is driven by the idea that household incomes no longer match median home prices, and some analysts point to rapidly cooling Sun Belt markets that saw the largest pandemic-era runups.
Two important points when you read that kind of doom-saying:
- Media and online channels reward strong, negative headlines. Sensational language draws clicks, and sometimes analysis is framed to drive engagement rather than to present balanced expectations.
- National averages hide local variation. A 50 percent decline would be catastrophic national-wide and would require systemic mortgage distress and massive oversupply — a repeat of 2008 at scale. Current data show slowing price growth and pockets of decline, not a national collapse.
The takeaway: treat extreme projections as prompts to look deeper into data and local conditions, not as inevitabilities.
National numbers versus local markets: why where you live matters
A national forecast provides a backdrop, but every market is local. Pricing dynamics in Atlanta, Omaha, Phoenix, and coastal metros can differ substantially. For example, some Sun Belt metros that ran hot in 2020–2022 have seen inventory rise and demand cool, producing price declines or larger discounting. Meanwhile, other regions with steady job growth, strong local economies, or constrained supply remain stable.
Local agents and buyers should focus on:
- Inventory trends: how fast listings are moving and whether price cuts are common.
- Employment and new construction: cranes and data centers are forward-looking signals of demand.
- Affordability and buyer pool: how many sidelined buyers are waiting to re-enter if rates fall a bit.
Practical moves for buyers, sellers, and agents in 2026
Buyers
Keep a long-term perspective. If mortgage rates dip modestly and you plan to stay in a home for several years, small improvements in affordability can justify buying now rather than waiting for a perfect market. But do not let preapproval alone dictate your max purchase price. Create a budget that leaves room for maintenance, property taxes, insurance, and life events.
Sellers
Price realistically. If your home is not selling, it is likely priced outside of current market expectations. In certain local markets sellers are already cutting prices; being inflexible creates longer listing times and more chances for buyers to negotiate. Highlight unique value: recent repairs, a strong neighborhood school, or nearby employment hubs are real selling points.
Agents
Educate clients about the relationship between Fed messaging, bond markets, and mortgage rates. Help buyers do true affordability calculations, and advise sellers on comparable trends and realistic pricing. Use local data — daily MLS edits, fresh patchwork in the street signaling sewer work, crane counts, and employer announcements — to paint an accurate picture of supply and demand.
Common buyer mistakes and how to avoid them
Many buyers make the same errors: stretching to the top of preapproval limits, skipping critical inspections, and underestimating maintenance costs. Two practical examples:
- Relying only on lender preapproval: A lender might qualify someone for a mortgage amount, but that does not mean the payment fits into their lifestyle. If monthly essentials and an emergency fund are squeezed out, unexpected repairs become a real risk.
- Skipping a sewer scope on older homes: Tree roots and aging clay or cast-iron pipes can create catastrophic surprises. A failing main sewer line can easily cost $10,000 to $20,000 to replace. A camera inspection is a small price for peace of mind.
Renting remains a valid and sometimes smarter option depending on timing, career mobility, and personal preference. Home ownership is attractive, but the decision must align with finances and readiness for upkeep.
FAQs
Will mortgage rates fall enough in 2026 to make a big difference for buyers?
Expect modest declines rather than dramatic drops. Markets may price in Fed cuts ahead of official moves, which could nudge mortgage rates lower and improve monthly affordability for some buyers, but do not expect a quick return to 3s or 4s nationwide.
Are home prices going to crash like 2008?
A national repeat of 2008 would require large-scale mortgage distress and systemic oversupply. Current signals show slowing appreciation and localized corrections, but not a coordinated nationwide collapse. Local downturns can still be painful, so assess risk by market.
What should sellers do if listings are sitting or getting price cuts?
Re-evaluate price and marketing strategy. If showings are low and offers are scarce, the listing may be mispriced. Improve preparation, highlight recent updates, and be open to realistic negotiation timelines.
How important is local data versus national reports?
Local data is crucial. National figures create context, but supply, employment, and price action vary by metro and neighborhood. Track local unemployment, new construction, major employer activity, and MLS days-on-market for actionable intelligence.
Which inspections should buyers never skip?
A full home inspection is standard, but on older homes also insist on a sewer scope camera inspection and, when relevant, tests for structural or mechanical systems. These identify potential large-ticket repairs before closing.
Final perspective
2026 looks like a year of modest recovery rather than dramatic rebound or collapse. If rate cuts arrive and some sidelined buyers re-enter, sales volume can climb faster than prices. Local conditions will dictate how much any national trend matters for you.
Keep your decisions grounded in local data, realistic budgets, and proper inspections. Headlines and loud forecasts will always grab attention, but careful planning and honest assessments deliver better outcomes.
"Homes sell for market value. If the home isn't selling, it means it's not priced right."
Use that as a litmus test when you evaluate listings: are sellers responding to market signals, or clinging to pre-pandemic expectations? The answer matters more than talking points.
Read More: Why the 50-Year Mortgage Should Scare You
