Top Housing Economist Issues Grim Forecast Revision as Higher Rates Slam the Market

National Association of Realtors® Chief Economist Lawrence Yun has issued a grim revision to his 2026 housing market forecast, reflecting the unexpected surge in mortgage rates this year."Markets are constantly changing—some have a positive impact on the housing market, and others, negative. The big unpleasant event over recent months is the fast-rising mortgage rates, therefore further denting the market outlook," he tells Realtor.com® of his latest forecast update.Last November, Yun projected existing-home sales would rise 14% in 2026 from the three-decade low reached last year, while forecasting that median prices would grow by 4%. But by April, Yun had already started tempering expectations, projecting that the existing-home sales volume would rise just 4% from last year. Yun cited high interest rates, inflation, and growing economic instability from the Iran war as factors shaping his outlook. Now, Yun says he expects existing-home sales volume and prices to grow around 2% or less this year compared to 2025. Regarding newly built homes, he projects new-home sales will decrease by 5% year over year.Yun says mortgage rates are the culprit for the grim revisions. Initially, he ha...