The National Association of Realtors (NAR) expects existing-home sales to climb 4 percent by the end of 2026, a modest rebound from current depressed levels. Chief Economist Lawrence Yun attributed the projected uptick to gradual market adjustments, though he acknowledged persistent headwinds. The forecast arrives as home sales hover near 4.2 million annualized, well below historical norms.
HousingWire's analysis highlights a stubborn constraint known as lock-in, where homeowners with low mortgage rates are reluctant to sell. This phenomenon is predicted to prevent roughly 870,000 sales in 2026, with only about 5.8 percent of that effect decaying each year as homeowners gradually adjust. That slow release of inventory could temper any sharp rise in transaction volume.
Mortgage rates remain the dominant factor for buyer affordability. While rates have eased from their 2023 peaks, they still exceed levels that would trigger a broad refinancing wave. The gap between new purchase rates and older low-rate mortgages keeps many potential sellers on the sidelines, limiting supply and propping up prices.
For buyers, the backdrop is challenging: low inventory, still-high prices, and persistent competition for move-in-ready homes. Sellers are seeing longer days on market in some regions, and negotiation leverage has modestly shifted. However, the NAR's forecast suggests that if rates hold steady or decline, pent-up demand could translate into higher transaction counts by year-end 2026.
Economists caution that the lock-in effect may be more durable than anticipated. If rates stay elevated, the projected sales recovery could underperform, with many would-be sellers continuing to hold their properties. The path to a normal market depends heavily on how quickly these behavioral barriers erode.