The National Association of REALTORS’ economic and real estate summit, held virtually in December, recapped the trends of 2025 and discussed what the coming year has in store for today’s homebuyers.
Presenters were NAR’s deputy chief economist Jessica Lautz, who analyzes trends for NAR members and consumers; Nadia Evangelou, NAR’s senior economist and director of real estate research, who focuses on regional and local market trends and housing affordability; and NAR’s chief economist Lawrence Yun, who oversees the research group at NAR and is responsible for a wide range of research activities for the association.
Yun opened with a look at last year’s data. He said at the end of December, existing home sales rose 5.1% in month-over-month sales in all regions of the U.S. Year-over-year sales rose in the South, remained flat in the Midwest and West and decreased in the Northeast.
According to Yun, 2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales. “However, in the fourth quarter conditions began improving with lower mortgage rates and slower home price growth,” he said. “December home sales, after adjusting for seasonal factors, were the strongest in nearly three years. The gains were broad-based, with all four major regions improving from the prior month.”
“We have a housing shortage,” Yun said, but he predicted we will see more inventory coming onto the market as homeowners face major life changes. Events such as growing families, job relocation or a death in the family can cause people to put their homes on the market as they look for a different home to fit their changing needs. At the close of 2025, the U.S. had slightly more than a three-month supply of unsold inventory. Yun said, “An increase in inventory typically happens in February.”
While there may be an overall housing shortage, Evangelou said “one of the biggest lessons from 2025 was that more homes on the market does not automatically lead to more home sales. If buyers cannot afford the homes that are listed, then more listings don’t create more options for them.”
However, Evangelou had a more optimistic outlook when she said that “affordability will improve in 2026 as mortgage rates ease, but affordability only turns into real activity in markets where the homes coming on the market actually match what local incomes can support.”
Evangelou highlighted factors that are assessed to determine affordability in a
homebuyer’s market:
•A high concentration of millennials (ages 35-40)
•Income growth
•Strong job growth
•Migration, or a market that is attracting new residents
•Market response when mortgage rates reach 6%
•Home price cuts indicate that sellers are meeting buyers’ demands
•New home construction reflects builder confidence and future inventory
First-time homebuyers are finding “creative ways of entering the market,” said Lautz. Her research of the 2025 first-time homebuyer revealed two major converging trends: a continuation of the all-cash buyer trend and buyers who are relying on financial assets, financial gifts or loans from friends or parents or delaying the purchase of a home while waiting for an inheritance.
It used to be that the age of most first-time homebuyers was around 28-30. However, the research now indicates that “we’re actually seeing them at the highest age ever recorded, at 40. This means perhaps less moves and it means lost equity gains over one’s lifetime.,” Lautz said.
Among primary-residence buyers, “we can actually see that the share of first-time homebuyers has essentially been cut in half from what it was before the pandemic or the Great Recession,” Lautz said. Historically, she explained that “about 40% of the market would be first-time homebuyers. But now they’re being hit with headwinds such as lack of inventory and affordability. She said “headwinds outside of the housing market,” such as student loan debt and high rent, are also impacting young people’s ability to purchase a home.
Delaying the purchase of a first home means that the median age of repeat homebuyers is also increasing. Historically, it has been as young as 36 years old, but the 2025 data cites a median age of 62 for repeat homebuyers, Lautz said. Buyers today plan on staying in their home for a long period of time, she said.
“We can also see that there are more single women in today’s housing market, more unmarried couples and more roommates teaming up to purchase a home together,” Lautz said.
While more challenges may exist for today’s homebuyers, home ownership is still a vital part of the American dream and people are finding a way to make that dream come true.
To view the summit and supporting slides, go to https://www.nar.realtor/events/nar-real-estate-forecast-summit
This article appears in March SBJ 2026.