NAR Chief Economist Forecasts 9% Bump in Home Sales

NAR Chief Economist Forecasts 9% Bump in Home Sales

At the National Association of Realtors® (NAR) NXT conference, Chief Economist Lawrence Yun projected a 9% increase in existing home sales for 2025, followed by a 13% rise in 2026. He also anticipates new home sales to grow by 11% in 2025 and 8% in 2026. Yun attributes these forecasts to expected stabilization of mortgage rates around 6%, ongoing job market growth, and an increase in housing inventory compared to the past five years. Additional points:

• Household equity at a record high

• Expect 6 to 8 interest rate cuts

• Mortgage rates to stabilize between 5.5% and 6.5%

Ralph’s Take

While Yun’s forecasts are optimistic, I hold a little skepticism. At last year’s event, he projected a 13% increase in existing home sales for this year, anticipating declining inflation and mortgage rates hovering around 6% by spring. Instead, inflation surpassed expectations, pushing mortgage rates higher through March and April, peaking at 7.22% in May. While I’m naturally an optimist, and I remain hopeful for a more balanced market next year, I’ll be closely watching interest rates, inventory, and demand to see how they evolve.