Existing-Home Sales and Prices Expected to Climb 4% in 2026, According to NAR
The U.S. housing market is showing signs of renewed momentum. According to the latest forecast from the National Association of Realtors (NAR), existing-home sales are projected to rise 4% in 2026, with median home prices also climbing 4% over the same period. While affordability challenges and market misinformation continue to hold some buyers back, NAR's chief economist Lawrence Yun is painting a cautiously optimistic picture for the year ahead — one that rewards homeowners and signals opportunity for those ready to make a move.
Mortgage Rates Holding Steady Around 6.5%
One of the most closely watched variables in the housing market remains mortgage rates. Yun projects that rates will average approximately 6.5% throughout 2026 — a figure that, while elevated compared to the historic lows seen in 2020 and 2021, represents a degree of stability that buyers and sellers can plan around. Predictability in mortgage rates, even at higher levels, tends to reduce the hesitation that causes buyers to sit on the sidelines indefinitely.
For prospective homebuyers who have been waiting for rates to drop dramatically before entering the market, this forecast suggests that meaningful relief may not arrive as quickly as hoped. Financial advisors and real estate professionals widely agree that waiting for the "perfect" rate environment can be a costly strategy when home prices continue to appreciate in the meantime.
Homeownership Remains a Powerful Wealth-Building Tool
Yun took center stage at a NAR forum this week to reinforce a point that often gets lost in conversations dominated by affordability concerns: homeownership is one of the most reliable paths to building long-term wealth in the United States. According to his projections, the typical homeowner can expect to gain approximately $16,000 in household wealth this year alone, simply as a result of rising home prices.
"Homeowners will continue to build wealth, while renters are simply spinning their wheels," Yun stated in a NAR press release. That wealth gap between owners and renters is not a new phenomenon, but the speed at which it compounds over time makes the decision to buy — even in a challenging market — a financially significant one.
To frame the magnitude of long-term home price appreciation, Yun pointed to historical data: the national median home price in 1990 was just $90,000. Even expensive cities like San Francisco, where prices were considered sky-high at the time, saw median prices reach only $250,000 that year. Fast forward to 2026, and the national median hovers around $430,000. Yun's research suggests that figure could reach $1 million by 2051 — a projection that, while striking, aligns with the historical trajectory of home price growth over multi-decade periods.
The U.S. Economy Is Expected to Avoid a Recession in 2026
The NAR forecast extends beyond the housing market itself, offering a broader economic outlook that should reassure buyers and sellers alike. The organization projects that the U.S. economy will sidestep a recession in 2026, driven in large part by surging investment in artificial intelligence infrastructure and data centers. This wave of technology investment is generating jobs, supporting consumer confidence, and contributing to overall economic resilience.
On the employment front, NAR forecasts that the unemployment rate will remain below 5%, with job gains reaching 400,000 over the course of the year. A stable labor market is a foundational element for housing demand — employed Americans are far more likely to qualify for mortgages, commit to long-term purchases, and sustain the broader real estate ecosystem.
Certain Buyer Segments Are Actively Purchasing Despite Market Gridlock
Despite a widespread perception that the housing market is stuck in gridlock — shaped by a combination of limited inventory, elevated prices, and higher mortgage rates — NAR researchers have found that specific buyer segments are actively transacting. The market is uneven, and opportunity exists for those who understand where demand is concentrated and how to position themselves effectively.
NAR Deputy Chief Economist Jessica Lautz highlighted a critical piece of misinformation that may be keeping would-be homebuyers out of the market unnecessarily: the belief that a 20% down payment is required to purchase a home. In reality, the typical down payment for a first-time homebuyer in 2025 was just 10% — and various loan programs allow qualified buyers to put down even less.
Lautz noted that she has heard this misconception repeatedly while traveling across the country, suggesting it is widespread and deeply ingrained. For millions of aspiring homeowners, this false assumption about upfront costs may be the single biggest barrier standing between them and building the kind of wealth that homeownership provides.
What This Means for Buyers, Sellers, and Investors in 2026
The NAR's 2026 forecast carries practical implications across the board:
- For first-time buyers: Don't assume you need 20% down. Explore FHA loans, conventional low-down-payment programs, and state assistance options. Every year spent renting instead of owning is a year of potential equity growth that you can't recover.
- For existing homeowners: Your asset is appreciating. Even modest price growth translates to meaningful wealth gains over time, and the long-term trajectory — potentially reaching a $1 million national median by 2051 — underscores the value of staying invested in real estate.
- For sellers: A 4% increase in sales volume and prices suggests sustained demand. While conditions vary significantly by local market, the macro trend supports favorable selling conditions, particularly in supply-constrained areas.
- For investors: With recession risks easing and employment holding steady, the rental market will remain robust. Rising home prices also support long-term appreciation strategies across both residential and commercial property types.
The Bottom Line: A Market With More Opportunity Than Headlines Suggest
The 2026 housing market is not without its challenges. Affordability pressures remain real, inventory in many markets is still historically tight, and mortgage rates are unlikely to return to pandemic-era lows anytime soon. But the NAR's forecast makes clear that underneath the headlines, the fundamentals are solid. Sales are growing, prices are rising, jobs are being created, and the economy is holding firm.
Perhaps most importantly, the wealth-building case for homeownership remains as compelling as ever. Whether you're a first-time buyer wrestling with down payment myths or a long-time owner wondering if now is the right time to sell, NAR's data points to one consistent conclusion: in the long run, owning a home has almost always been the right financial decision — and 2026 is unlikely to be the exception.