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The 2026 Housing Outlook: Why NAR’s Rose-Colored Forecast Doesn’t Add Up
The National Association of Realtors (NAR) just released a housing forecast meant to reassure buyers, sellers, and industry professionals that brighter days are ahead.
Recently, NAR confidently projected that home sales will jump 14% and home prices will rise another 4% in 2026. Bold claims for a market where millions have already been priced out.
Let’s start with their own words.
According to NAR’s chief economist Lawrence Yun:
“The expected rebound reflects easing mortgage rates, continued job gains, and improving market stability after several challenging years.”
He goes on to say:
“As we go into next year, the mortgage rate will be a little bit better (around 6%). It’s not going to be a big decline, but it will be a modest decline that will improve affordability.” (emphasis added)
A little bit better. A mortgage rate of around 6%. Some amount of continued job gains. And a vague appeal to “market stability.”
That’s the foundation for a prediction the housing market will suddenly become healthier and more active?
Hold on here . . .
None of those ingredients meaningfully change the affordability crisis we’re in.
Affordability Isn’t a Feeling — It’s Math
The harsh truth is this: most Americans cannot afford to buy a home today, and nothing in NAR’s forecast suggests that changes in 2026.
Fannie Mae recently broke down what it would take to bring affordability back to where it was in the 2016–2019 window—when homeownership was much less challenging.
According to their analysis, one of the following would need to occur:
- Home prices would need to fall 39%
- Median household income would need to rise 60%
- Mortgage rates would need to drop to 2.35%
Not “a little bit better.”
Not “around 6%.”
Not “continued job gains.”
A 39% price drop, a 60% income spike, or ultra-low pandemic-era mortgage rates is what it would take to return to pre-pandemic affordability.
Which one of those seems likely by 2026?
Exactly.
So What Is NAR Actually Selling?
When you strip away the optimistic veneer, NAR’s prediction reads less like an economic forecast and more like what the housing industry wants to be true.
- Higher sales = more commissions.
- Higher prices = more equity for current owners.
- Optimistic messaging = pressure on hesitant buyers.
But reality doesn’t bend to optimism.
Mortgage rates dipping to 6% barely moves the needle when the average home price is still near record highs and incomes haven’t remotely kept pace. Wage growth is not going to rise 60% next year. And absent a major economic downturn, home prices aren’t dropping 39% either.
So where does affordability come from?
It doesn’t.
Not under these conditions.
Wishful Thinking Won’t Fix the Housing Market
NAR can paint whatever picture they like, but the numbers don’t support the narrative.
We’re in a structural affordability crisis that modest mortgage rate declines won’t solve. Buyers know it. Renters know it. Anyone who has run the math knows it.
Housing will remain out of reach for millions until supply increases meaningfully, incomes rise substantially, or mortgage rates fall dramatically. None of which are reflected in NAR’s 2026 assumptions.
Until then, hope is not a housing policy—and wishful thinking is not a forecast.
