2026: Nation’s Home Sales to Rise Sharply

In Houston, The nation’s home sales are slated to jump 14% next year as lower mortgage rates and improving job growth fuel the market, as stated by National Association of Realtors Chief Economist Lawrence Yun.

Yun delivered his 2026 housing outlook at NAR NXT, the association’s annual convention which was held at the George R. Brown Convention Center in Downtown Houston, bringing some 12,000 convention goers to Space City.

“Next year is really the year that we will see a measurable increase in sales,” Yun told an audience of thousands in the Houston convention center.

The Federal Reserve is slated to cut rates again in 2025 and several more times in 2026 which should shore up the job market and lead to lower mortgage rates, Yun said.

In The Nar economist predicted that the average 30, year mortgage rate will drop to 6% in 2026, down from around 6.7% today.

“As we go into next year, the mortgage rate will be a little bit better,” said Yun. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”

Sales of newly built home, which declined about 2% in 2025 will increase by 5% in 2026. Home builders have been dealing with the impact of new tariffs that raise the cost of building materials.

Yun noted that Houston was one of the strongest markets in the nation for home building. In 2024, Houston led the nation in single-family building permits. The growing supply of new homes will create more buying opportunities for first-time homebuyers who are struggling to buy a home in this era of rising home prices and higher mortgage rates.

“Houston is creating more home construction, and therefore making home prices much more reasonable,” said Yun. “Given the job creation, buyers will inevitably be showing up to Houston once the mortgage rate goes down.”

More people have been applying for mortgages, indicating that housing demand is strong.

“People’s desire to enter the market has been consistently positive,” Yun said. “They just want a little lower mortgage rates and more inventory.”

Yun noted that Houston is one of the strongest markets in the nation for home construction and that expanding supply helps to keep home prices lower.

Houston home builders surpassed the construction pace of all the builders in the Los Angeles area, San Diego and San Francisco/Oakland markets combined. The Houston area had 655,000 housing starts in the 10-year period ending in August 2025. Builders in the LA, San Diego and the San Francisco areas combined had only 558,000 starts in that time period, Yun said.