This Week in Real Estate: Builder Price Cuts Climb and 2026 Sales Outlook Strengthens

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At the Residential Economic Issues and Trends Forum during the NAR NXT conference This Week in Real Estate, NAR Chief Economist Lawrence Yun forecasted a 14% increase in existing-home sales, a 4% rise in home prices, and an average mortgage rate of 6% in the coming year. 41% of homebuilders reported cutting prices while 65% reported using other sales incentive incentives according to the National Association of Home Builders/Wells Fargo Housing Market Index.  Mortgage purchase applications advanced 6% week-over-week on a seasonally adjusted basis and surged 31% compared to the same period last year, marking the strongest pace since September. On an unadjusted basis, the purchase index reflected the most robust start to November since 2022. With the government shutdown concluded, attention now shifts to critical economic data that had been delayed, including employment and inflation figures. The first release, the September Employment Situation Report, is scheduled for Thursday, followed by the publication of real earnings data on Friday. Below are key events from the second week of November impacting our business:
NAR FORECAST: HOME SALES EXPECTED TO JUMP 14% IN 2026. Existing-home sales are projected to rise by around 14% in 2026, according to National Association of REALTORS® Chief Economist Lawrence Yun. Yun delivered his 2026 housing outlook today during the Residential Economic Issues and Trends Forum at NAR NXT, The Realtor Experience, in Houston. Yun said the expected rebound reflects easing mortgage rates, continued job gains, and improving market stability after several challenging years. Home prices are forecast to increase by 4% next year, supported by steady demand and persistent supply shortages. “Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.” Mortgage rates are projected to decline modestly, averaging around 6% in 2026. “As we go into next year, the mortgage rate will be a little bit better,” said Yun. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”
Full Story…   NAR  
THE SHARE OF HOMEBUILDERS OFFERING PRICE CUTS ON NEWLY BUILT HOMES REACHED A NEW FIVE-YEAR HIGH IN NOVEMBER, as builders grappled with headwinds from economic uncertainty. This month, 41% of builders reported cutting prices, a record high in the post-Covid period, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday.
The average price reduction reported by builders was 6% in November, the same rate as the previous month. Meanwhile, 65% of builders reported using other sales incentives such as rate buydowns in November, tying the share in September and October.
Full Story…REALTOR.COM
MORTGAGE DEMAND FROM HOMEBUYERS HITS HIGHEST LEVEL SINCE SEPTEMBER. Mortgage applications to purchase a home rose 6% last week to their strongest pace since September, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 31% higher than the same week one year ago. “Purchase applications for conventional, FHA, and VA loans increased, as potential homebuyers continue to shop around, particularly in markets where inventory has increased and sales price growth has slowed. Based on the unadjusted purchase index for the week, this was the strongest start to November since 2022,” said Joel Kan, an MBA economist, in a release. Demand for refinancing, which had been very strong last month, dropped 3% for the week but was still 147% higher than the same week one year ago, thanks to lower rates.
Full Story…  CNBC

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