NAR revises down home sale, mortgage rate forecasts — again
NAR’s chief economist initially expected existing home sales to jump 14% in 2026. But after a lackluster spring, he no longer believes that’s in the cards.
WASHINGTON, D.C. — The National Association of Realtors' chief economist, Lawrence Yun, once again adjusted down his forecast for the national housing market as persistently elevated mortgage rates refused to cooperate with expectations.
Revisions to mortgage rate, existing home sales forecasts: At NAR's midyear conference on June 16, Yun painted a far less rosy picture than late last year, when he anticipated the average mortgage rate would fall to an even 6% in 2026.
Now, he predicts mortgage rates in 2026 will barely budge from the 6.5% to 6.7% range seen through most of 2025. Consequently, he no longer expects existing home sales to rise 14%, as he forecast last November. Instead, he thinks they'll rise a modest 4%.
Yun similarly downgraded his 2025 forecast one year ago due to stubbornly high mortgage rates.
"We are not in a recession, but we're not in spectacular economic growth either," Yun told conference attendees on Tuesday. Pointing to the "hyperbolic" increase in business investment spending on AI, he credited the "AI boom" with "holding up the economy."
$1M median home price is coming: Yun also speculated that the nation's median home price, which he pegged at about $430,000, would hit $1 million in about 25 years. To add perspective, he noted that the median home price nationally was just $90,000 in 1990.
10 buyer groups with potential: Though the housing market hasn't experienced the kind of springtime rebound many real estate professionals had hoped for, there are opportunities for agents who know where to look.
There are, for example, 10 types of potential clients hiding in plain sight, according to NAR Deputy Chief Economist Jessica Lautz. These include:
The owner who purchased a home 10 years ago. The median length of ownership tenure is now 11 years, according to Lautz. She encouraged Realtors to check in with people they worked with a decade ago who may be ready to make a change.
The owner who thinks they have to stay put for decades. There are first-time buyers out there who don't realize that they don't have to stay in a home for several years — and can move when they're ready, Lautz said.
The owner who doesn't know what equity is — or how to find it. Some first-time sellers — including 17% of younger baby boomers who have never sold a property — may be ready to move but aren't well-informed about the process.
The first-time buyer who thinks they must put 20% down. Some consumers don't know that they can buy with a down payment of as little as 3%. "The typical down payment for first-time homebuyers was just 10% last year," Lautz noted.
The Gen Zers who learned about student debt as kids. These youngest homebuyers have less student debt and a higher propensity to use government programs to purchase, according to Lautz.
Single men. Or, as Lautz put it, "The dude who thinks he has to be partnered" to buy a home.
The baby boomer who doesn't really want to downsize. "Younger baby boomers are not downsizing. They are moving to be closer to the grandbabies," Lautz said. "Whether the millennial wants them or not, they're coming," she added, getting a laugh from the audience.
DINKs and SINKs. Double- or single-income couples with no kids are not paying for childcare costs, which Lautz identified as among the biggest obstacles to saving up for a home.
Renters with pets. Almost three-quarters of households have pets — and 16% of current buyers factor their animal into their choice of neighborhood, according to Lautz.
HENRYs. This group of potential buyers gets its nickname from being "high earners" who are "not rich yet," Lautz explained, prompting chuckles from attendees.