HOUSTON – (Realty News Report) – The nation’s home sales are expected to jump 14% next year as lower mortgage rates and improving job growth fuel the market, according to 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 expected 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.
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.
Housing attainability is one of the top 10 issues facing the real estate industry and related economic conditions, said John Hentschel, the 2025 Global Chair of the Counselors of Real Estate.
Higher costs are impacting first-time homebuyers who are looking to enter the housing market as well as would-be move-up buyers, Hentschel said.
The challenges facing first-time was demonstrated by the NAR’s 2025 Profile of Home Buyers and Sellers. The typical age of first-time home buyers has reached an all-time high of 40 years-old.
That means first-time homebuyers account for only 21% of today’s home sales, a record low.
Another emerging trend is the growing buying activity by aging Baby Boomers.
“People are moving to be close to their grandchildren. I call this the grandbaby effect,” said Jessica Lautz, Deputy Chief Economist and Vice President of Research, National Association of Realtors.
Breaking News: Houston Convention Center Evacuated Sunday
HOUSTON – The George R. Brown Convention Center was evacuated just before 2:00 PM Sunday afternoon interrupting programming at the National Association of Realtors NXT convention.
As alarms blared, thousands of convention goers exited the convention center and the Houston Fire Department responded.
After a short delay, people were allowed back into the convention center.
A Houston Police Department officer told Realty News Report that the alarm may have been triggered by what was erroneously detected as a possible restaurant fire.
NAR Adopts New Strategic Plan to Strengthen Member Value and Modernize the Association
HOUSTON – The National Association of Realtors adopted its 2026-2028 Strategic Plan on Sunday after it was approved unanimously by the NAR Executive Committee. The Strategic Plan provides a roadmap that will modernize the organization and transform the member experience. The plan will be implemented on January 1, 2026.
“NAR is rebuilding trust by executing the largest transformation in real estate history, and this Strategic Plan will be our roadmap,” said NAR CEO Nykia Wright. “The plan is data-informed to ensure that NAR is investing in initiatives that members and the industry find most valuable. It also includes success metrics so our members and the industry can hold NAR accountable to the commitments we are making.”
Nov. 17, 2025 Realty News Report Copyright 2025
Photos: NAR Houston convention photos by Ralph Bivins, Realty News Report Copyright 2025
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File: Nation’s Home Sales to Rise Sharply in 2026 – Lawrence Yun, Chief Economist, Nation’s Home Sales to Rise Sharply in 2026. George R. Brown Convention Center in Houston