- Economist Lawrence Yun revised his U.S. home sales growth prediction from 14% to 4% for 2026.
- The U.S.-Israeli war with Iran and rising mortgage rates have impacted the housing market.
- Utah saw an 8% increase in March home sales, despite the national downward trends.
SALT LAKE CITY — This was supposed to be the year the U.S. housing market rebounded.
A 14% increase in existing home sales had been forecast for 2026 by the National Association of Realtors chief economist, Lawrence Yun, a double-digit rise that would have ended three years of the lowest volume of home sales in a decade.
"Next year is really the year that we will see a measurable increase in sales," Yun declared last November at an association conference in Houston. "Home prices nationwide are in no danger of declining."
But this week, Yun stepped back from what was called an optimistic prediction.
Now, the economist is predicting existing home sales volume will only go up 4%, a change called "a sharp pullback," by the association, "an early sign that the U.S.-Israeli war with Iran is taking a toll on the housing market."
Not only did Yun decrease expectations for existing home sales, he did the same for the sale of newly built homes, from 5% growth this year to zero. He did not, however, alter his prediction that home prices would go up 4% in 2026.
The reason for the revisions? The rapid rise of mortgage rates, which had finally fallen below 6% for the first time since 2022 when the war was launched in late February. Since then, rates went up about half a percentage point before dropping slightly on news of a ceasefire.
"Now that the mortgage rate has increased and is likely to stay elevated at least above 6% in the upcoming months, I had to reduce the forecast outlook," Yun said Monday. Previously, he'd said rates should average about 6% this year, but now believes they'll stay around 6.5%.
Higher mortgage rates mean fewer buyers can enter the market, Yun said. He noted that home sales during the first quarter of 2026 have been "a disappointment." The association reported a 3.6% decrease in the sale of previously owned homes from February to March.
The decline in month-over-month sales of existing homes occurred throughout the country, the association said, but year-over-year, sales were up in the South and West.
Data provided Friday by the Utah Association of Realtors showed an 8% increase in the number of homes sold in Salt Lake County in March compared to the same month last year and a 7% increase statewide.
Utah Association of Realtors President-elect Aaron Drussel told the Deseret News that it remains to be seen whether that continues because many buyers are still staying on the sidelines when it comes to making major purchases.
"We're still seeing a struggle for buyers to enter the market," Drussel said, because "although rates temporarily dipped below 6%, they are back up to around the 6.5% range. That combined with low consumer confidence has created hesitation for many buyers."
