NAR Chief Economist Lawrence Yun Says Home Sales Expected to Improve in Second Half of 2026
Home sales are expected to improve modestly in the second half of 2026 if inventory and supply grow. Existing-home sales and median prices are forecasted to rise 4%, with mortgage rates averaging 6.5%. Homeowners may gain about $16,000 in wealth this year. The economy is projected to avoid recession, with unemployment under 5% and 400,000 job gains. The national median home price could reach $1 million in about 25 years. Despite market challenges, various buyer segments remain active, and common myths like needing a 20% down payment persist.
Luxury home interest doubles as US draws global wealth in 2026
International searches for US luxury properties doubled in early 2026, with California and New York leading demand. Unique property searches, including estates and private islands, rose 146%, driven by buyers seeking land expansion for privacy and legacy building. Luxury single-family home sales increased 2.8%, fueled by a rise in all-cash purchases. Inventory may rise as mortgage rate disparities could release "shadow inventory," impacting market dynamics.
Newrez Data Shows First-Time Buyers Account for Nearly Half of Purchase Mortgages as Homeownership Remains Part of the American Dream
As the U.S. marks its 250th anniversary, 81% of adults still view homeownership as part of the American Dream. In 2025, first-time homebuyers made up 49% of new purchase loans, with a median age of 33. Repeat buyers accounted for just over half of purchase originations, buying more expensive homes with a median price of $482,000. Homeownership remains a key goal despite evolving paths to achieve it.
US Home Prices Hit an All-Time High
In Late-Q2, the US median home-sale price reached $408.8K, ↑2.2% yearly, setting a record as strong high-income demand met a thinner supply of homes.
Existing home sales were ↑4.2% yearly to a seasonally adjusted annual rate near 4.4M, while pending sales were ↑4.5%, signaling broader current US momentum.
At the national level, gains were concentrated at the top end, with luxury activity helping drive overall price growth across the country's largest housing markets.
Competition also intensified: 22.2% of US homes sold above their original list price in Late-Q2, the highest share in >1 yr nationally.
New listings were ↓~1% MoM nationally in Late-Q2, and an expert said many buyers should treat a first home as a stepping stone.
Texas Housing 2026-2027: Stabilization Over Crash
Texas housing market is expected to stabilize through 2026-2027, with modest price declines replacing the rapid growth seen during recent boom years.
Major metros like Austin, Dallas, and Houston may see softer prices as inventory rises and buyers gain negotiating power.
Stronger-performing regions such as El Paso and McAllen are forecast to post modest growth supported by affordability and local demand.
Forecast suggests a market correction rather than a crash, with steady population growth and economic fundamentals continuing to support long-term housing demand.
US Builder Sentiment Beats Expectations
In Mid-Q2 2026, the builder sentiment index ↑3 to 37, topping the 34 estimate while showing modest improvement from the prior reading.
Sales conditions ↑3 to 40, buyer traffic ↑3 to 25, and 6-mo sales expectations ↑3 to 45, giving builders better near-term signals.
Builders are slightly less aggressive with outright price cuts: ~32% reduced prices, versus ~36% in Early-Q2, though avg. discounts widened to ~6%.
Sales incentives remain elevated near ~60%, marking 14 straight months at that level as affordability challenges keep buyers value-focused in new-home negotiations.
An industry official said proposed housing legislation could increase national housing supply and ease builder concerns, even as long-term rates challenge demand.
Gen Z claims a record share of US purchase mortgage market
Gen Z now accounts for nearly 20% of rate locks and about a third of first-time homebuyer loans, relying heavily on government-backed financing. Non-traditional down payments, including family gifts and loans, have reached a seven-year high at 29%. Gen Z and Millennials make up two-thirds of purchase mortgage volume, while Baby Boomers hold 11%. Home prices grew 1.3% annually in June, with rising inventory suggesting softer future gains. Modern technology and down payment assistance programs are key to serving younger buyers.
The Top Features Making Homes Sell Shockingly Fast in 2026
Homes with pergolas sell over three days faster and for 2.2% more, offering shaded outdoor living spaces that extend usable backyard areas. Turf boosts sales speed by more than two days and increases price by 1.7%, appealing due to low maintenance and year-round greenery. Open shelving inside homes helps sell about two days faster and for 0.1% more by combining storage with visual appeal, enhancing buyer interest.
Mortgage Matters: Celebrating 250 Years: The Evolving American Dream of Homeownership
America celebrates its 250th birthday, highlighting the enduring dream of homeownership as a symbol of independence and stability. Modern mortgage options, including conventional, FHA, VA, and USDA loans, offer low or no down payment choices for first-time buyers. Local assistance programs also help with down payments. Success in homebuying involves a trusted team of a Realtor, mortgage lender, and title professional to guide buyers to closing.
U.S.: 2026 Home Price Growth Forecast Slows
Updated forecast now sees existing-home prices rising ~1% by end-2026, below the earlier ~2% call, as softer sales and more listings ease pressure.
Mortgage rates were still forecast near 6% through year-end, but stronger household income growth and slower prices were expected to trim the typical payment yearly.
Inventory was expected to grow, though the outlook was cut to ~4%; single-family starts were revised lower, with 2026 construction seen near 960K homes.
Existing-home sales were projected to rise ~1% in 2026 to ~4.1M, after a slow first half; activity stabilized in Early-Q2 and improved in Mid-Q2.
Sellers were adjusting with more realistic asking prices, helping limit price cuts, while rents were expected to edge down as new rental supply expanded.