National Association of Realtors Chief Economist Lawrence Yun has downgraded his forecast for existing home sales growth this year from 14 percent to 4 percent year-over-year. Yun elaborated on the updated forecast at Inman On Tour Nashville on Wednesday, pointing to stubbornly high mortgage rates, the oil price shock and softer job growth as key forces reshaping what was initially expected to be a strong rebound year.
TAKE THE INMAN INTEL INDEX SURVEY
Yun previously revealed his revised forecast on April 13 in a piece on Realtor.com. Inman spoke with Yun following his presentation to the standing-room-only crowd at the Country Music Hall of Fame in downtown Nashville.
Lawrence Yun | Chief Economist at the National Association of Realtors
At the start of the year, Yun had anticipated a more robust rebound, consistent with the housing market’s historically cyclical nature. “Housing is a very cyclical business,” Yun told Inman. “After a downturn, when it begins to recover, often double-digit percentage growth is very common.”
But that outlook, Yun said, has shifted. Mortgage rates, which briefly dipped below 6 percent earlier this year, have since moved higher amid global economic pressures, particularly an oil price spike tied to the war in Iran.
“Now the mortgage rate may be closer to 6.5 percent,” Yun said. “With a little higher mortgage rate, it’s going to shave off some percentage of growth.”
Instead of the double-digit gains typical of early-cycle recoveries, Yun now expects existing-home sales to rise about 4 percent in 2026 — a meaningful improvement, but a far cry from his earlier expectations.
Even so, he emphasized that the figure is a guide, not a fixed outcome. “The reality will be bigger or smaller than that number,” he said. “But even a 4 percent increase would mark the first meaningful growth after three years of essentially flat sales.”
A slower rebound than hoped
According to Yun, the housing market has been stuck in neutral since 2023, with existing-home sales hovering around 4.1 million annually. That prolonged stagnation has set the stage for a multi-year recovery cycle, even if the initial rebound is slower than hoped.
“When the market begins to recover from a downturn, it is typically multiple years of growth,” Yun said. “Maybe the 14 percent doesn’t happen this year — maybe it gets pushed into next year.”
Job growth expectations have also been revised downward, reflecting a cooling labor market. Still, he stopped short of predicting a formal recession. “I don’t see a GDP decline or a net negative jobs situation,” he said. “But job growth has been scaled back.”
That combination — slower hiring and higher borrowing costs — is likely to keep pressure on housing demand in the near term.
Lawrence Yun speaks at Inman On Tour Nashville 2026 | Image by: AJ Canaria Creative Services
‘Home prices are on solid ground’
One area of relative stability, according to Yun: home prices.
Despite affordability challenges, Yun said a persistent housing shortage, particularly in regions like the Northeast, continues to support price growth. “Home prices are on solid ground,” he said.
He expects prices to rise about 3 percent to 4 percent this year, driven by constrained supply and ongoing competition in underbuilt markets. For real estate agents, Yun said the environment remains challenging, but not without opportunity.
“This is a super competitive industry,” he said, pointing to the well-known dynamic where roughly 20 percent of agents generate 80 percent of the business. But even in a slower market, he said, top performers can still thrive.
“In challenging conditions, some people still have their best year,” Yun said
After three years of stagnation, Yun believes the market is finally beginning to shift, even if the pace is uneven. “I wish it were turning a little faster,” he said. “But it looks like we are turning the corner.”
That shift, he added, should gradually bring more buyers and sellers back into the market, setting the stage for a stronger recovery in the years ahead.
