2026 Housing Market Forecast: What NAR Is Predicting

Are you sitting on the fence about buying or selling a home?

You might want to scoot forward, because the latest housing market forecast gives us a lot to talk about.

At the recent National Association of REALTORS® conference, Chief Economist Lawrence Yun shared a positive outlook for the 2026 real estate market, one that could shift the way people approach homes for sale over the next two years.

Here are the big takeaways:

Home Sales Are Expected to Rise

• Existing-home sales are projected to jump about 14% in 2026.

• New-construction homes are expected to increase by around 5%.

More activity means more opportunity,both for buyers looking for more inventory and for sellers hoping to list while demand is strong.

Home Prices Will Keep Growing

The median home price is expected to rise another 4%, which supports what many of us in the real estate world already know: home values remain strong, and housing demand isn’t going anywhere.

Mortgage Rates May Finally Ease Up

The question I hear constantly is, “What are mortgage rates going to do?”
According to Yun, mortgage rates could dip to around 6% in 2026. That’s a welcome change from what buyers have been juggling this past year.

He also shared thoughts on the recent government shutdown, comparing it to the one in 2019. The market bounced back then, and early signs suggest we’re on a similar path now.

Even with economic bumps, foreclosure rates and mortgage delinquencies remain historically low, which shows that the market is still on very solid ground.

A Real Market Recovery Is on the Horizon

Overall, Yun described 2026 as the year we should finally see a true housing market recovery. Some areas might lag behind, but the nationwide trend is pointing upward.

Affordability Is Still a Challenge—But Improving

Even with better mortgage rates, buying a home is still tough for many first-time buyers or anyone shopping on the lower end of the price range.
The gap isn’t closed yet, but it’s slowly improving.

And for those watching interest rate trends, Yun expects the Federal Reserve to cut rates again in December and twice more in 2026.

Just remember: mortgage rates don’t follow the Fed directly. They’re influenced by inflation, Treasury yields, and broader economic conditions, so rate changes rarely move in a perfectly straight line.

What This Means for East Tennessee Buyers and Sellers

The big picture?
There’s finally some light at the end of the tunnel for anyone thinking about entering the real estate market, including areas like Knoxville, Maryville, Sevierville, and the Smoky Mountain region.

If you’re planning to buy a home, sell a home, or invest in real estate, these shifts matter, because timing, affordability, and inventory could look very different over the next year or two.

If you want to talk through what these changes could mean for your plans, I’m always here to help you make your move when the timing feels right for you.