NAR Drops Bullish 2026 Forecast – The Thaw is Coming
After years of home sales remaining in the 4 million range, the National Association of Realtors (NAR) now expects 2026 to surge by 14%. This would add roughly 560,000 additional closings, pushing total sales to approximately 4.56 million.
Although this remains below the historically healthy 5–5.5 million level, it represents a major improvement for the housing market. With mortgage rates expected to average around 6% next year, demand should increase and millions of refinance opportunities could become available. According to ICE, more than 5 million loans may move into refinance eligibility.
If rates fall below 6% and spreads continue to narrow, activity could accelerate even further. NAR also projects a nationwide home price appreciation rate of 4% in 2026, meaning a $500,000 home could gain approximately $20,000 in equity within one year.
Labor Market Still Flashing Yellow Lights
ADP’s weekly employment data shows private payrolls declining by roughly 2,500 jobs per week over the four weeks ending November 1. Although this is an improvement from the previous -11,250 per week, the trend remains weak.
- WARN layoffs reached 39,000 in October — the highest non-COVID month since 2009.
- Initial jobless claims rose to 232,000 (up from 219,000).
- Continuing claims increased to 1.96 million, the highest level since 2021.
Once laid off, workers are finding it increasingly difficult to secure new employment, signaling strain in the labor market.
Fed Governor Waller Turns Dovish
Federal Reserve Governor Christopher Waller, considered a potential future Fed Chair, delivered notably dovish remarks:
- Inflation is approaching 2% excluding tariff-related effects.
- The labor market is showing signs of stalling, with reduced wage pressure and declines in job vacancies and quits.
- He directly challenged the narrative that supply and demand are currently balanced.
Waller strongly supports a rate cut at the December 10 meeting and appears committed to that stance.
Technicals Suggest Floating
Mortgage-backed securities are holding above the 101.71 support level, with approximately 20 basis points of potential upside to the next technical ceiling.
Meanwhile, the 10-year Treasury yield has fallen below the key 4.126% Fibonacci level and is approaching its 50-day moving average support zone.
The technical landscape indicates that floating continues to be favorable. Rates have room to move lower into year-end, although highly risk-averse borrowers may still prefer to lock.
The Outlook for 2026
With improving rate conditions, a more supportive Fed posture, and rising buyer demand, 2026 may become the breakout year the housing market has been waiting for. Encouraging buyers to take action now could position them ahead of next year’s expected market acceleration.
Let’s close some loans.
