Our final real estate predictions for 2026

Looking forward

Welcome to our final edition of 2025!

It has been another incredible year. As always, we are thankful to you, and all our loyal readers, for continuing to let us into your inbox every week.

In this edition, we are going to give you our top tips and predictions for 2026 to help you get a head start on preparing–not just in your business, but your mindset.

We can’t emphasize this enough. Like any sport or practice, most of our business comes down to the mental game. In today’s Foundation Plans, we give you our best advice for mastering that aspect of your day-to-day life.

Please keep in mind–our advice is for next year. Until then, we hope you will take these next couple weeks to relax and enjoy all the fruits of your labor. That way, you will truly come back next year strong!

Until then, we wish all the best for this holiday season, and we will see you in 2026!

- James and David

Our top 7 predictions for 2026

1. Mortgage rates will remain above 6% – Most of the top forecasters see the 30-year fixed mortgage rate staying above 6% throughout 2026. However, it will remain lower than the 2025 average of 6.6%. Here’s an overview of projections heading into next year:

• Capital Economics: 6.5%

• MBA: 6.4%

• Compass: 6.4%

• Realtor.com: 6.3%

• Redfin: 6.3%

• NAHB: 6.2%

• Wells Fargo: 6.18%

• NAR: 6.0%

• Bright MLS: 6.0%+

• Zillow: 6.0%+

• Fannie Mae: 6.0%

2. Luxury market sales will not be affected by mortgage rates – As we saw this year, the luxury sector and the broader market are basically two separate worlds. Affordability challenges that dominate the general market are far less relevant in the luxury sector, where cash has been king. Currently, cash transactions make up at least half of all sales.

In major metros like New York, Los Angeles, and Miami, million-dollar homes are “entry-level” territory. We don’t see this changing anytime soon, or ever. Luxury homes are selling faster even as inventory rises, showing us seven-figure entry points are the new normal for that market. This is why we expect the luxury sector to buoy housing sales in 2026, just as they did in 2025.

Looking even further into the future, we see another factor playing a major role in this market: wealth transfers. They will play a pivotal role over the next decade, especially as Millennials and Gen X stand to inherit substantial assets. Over the next 10 years, $31 trillion will be transferred by 1.2 million wealthy people. We’ll be keeping a watchful eye on that trend.

3. Home prices will grow, but not by much – If you look at home value growth projections for 2026, you’ll see they vary across the board. That’s because pricing depends on local supply, local demand, and how sensitive buyers are to rates. But the majority of forecasters have home prices increasing 0.5% to 2.0%. This is good info to share with your clients. It’ll help them check any wild expectations they might have for home price appreciation next year. Here’s an overview of those projections:

• Cotality: +4.3%

• NAR: +4.0%

• Wells Fargo: +3.5%

• Realtor.com: +2.2%

• Capital Economics: +2.0%

• Fannie Mae: +1.3%

• Zillow: +1.2%

• Redfin: +1.0%

• Compass: +0.5%

• MBA: -0.3%

4. Housing inventory will rise – We believe the effects of the rate-locked phenomenon will linger into 2026. However, the impact of those effects will start to diminish. Most analysts agree that housing inventory will continue to grow next year, building on this year’s trend. Here are the top projections:

• Compass: +10%-15%

• BrightMLS:+10.9%

• Realtor.com: +8.9%

5. New construction will gain market share as buyer incentives continue – We think this one is a lock. Homebuilders will increase their market share as they continue to offer concessions, such as below-market mortgages and rate buydowns. We don’t see these buyer incentives going away anytime soon, especially with large builders like Lennar and D.R. Horton prioritizing pace over price. We believe smaller builders will follow suit. 

6. Home sales will rise, but remain below historical norms  – Yes, sales are projected to rise on average to about 4.244 million next year, but they’ll still remain well below historical norms. To give you context, in the past two decades, we’ve seen an average of 5.15 million annual home sales, with a peak of 7 million in 2005. Here are the projections for home sales volume increases in percentage terms for 2026:

• NAR: +14%

• Bright MLS: +9.0%

• Fannie Mae: +7.8%

• MBA: +6.3%

• Zillow: +4.3%

• Compass: +4.0%

• Realtor.com: +1.7%

7. Many investors are going to buy at least one more property next year – According to a recent survey by ResiClub and LendingOne, 68% of single-family rental investors say they’re very likely (51%) or somewhat likely (17%) to buy another investment property in the next 12 months. We believe single-family rental investors aren’t pulling back from the market; they’re just recalibrating and becoming more selective. Their interest in buying remains strong, even as many plan to sell underperforming assets and manage rising costs, particularly insurance costs. Agents, take note! Investors will continue to be a major source of transactions next year. Those who can bring well-priced opportunities, credible underwriting, and clear cash-flow narratives will be best positioned to broker deals.

When we decided to join Million Dollar Listing, it was all about reach. We knew the kind of clients TV exposure could bring. Today, social media has that same power. That’s why our partners at Estate Media created the Agent Growth Program specifically for agents and brokerages who want to elevate their social presence to the next level. You film in short sessions, and their team handles everything else: scripting, editing, posting, and performance tracking. The Blueprint readers get a free social media audit.

Schematics

The news that just missed the cuts

• Home prices are climbing faster in rural areas than in cities

• The budget needed to buy a move-in ready home

• Home insurance isn’t routine anymore – here’s how buyers are adapting

• To grow your real estate business in 2026, do this 

• Downtown Manhattan just saw its first $100M+ home sale in history

Foundation Plans

Advice from James and David to win the day

With this being our final edition of the year, we wanted to leave you with a few parting thoughts as we head into 2026.

Our loyal readers know we believe that knowledge, preparation, and strategy are essential to success in real estate. But they aren’t enough on their own. Lasting success also requires mastering your mindset. This is a business built on rejection and setbacks. Without a strong mental foundation, self-doubt and fear can quietly take over. Before you can effectively serve others, you have to take care of yourself first. 

So, with that in mind, we’d like to leave you with a few tips and principles we believe are essential to building a resilient mindset worthy of any high performer.

1. Reframe challenges as opportunities – View obstacles as stepping stones for growth. That way, you’ll never look at failure as failure. You’ll look at it as a learning curve for a step in the right direction. If you’re in the real estate industry, you have to expect rejection. If you don’t, you’re going to get crushed. But if you expect rejection, it becomes part of the journey. We live by the motto that anytime you hear a no, we’re closer to a yes. If you adopt this shift in mindset, it’s very powerful.

2. Eliminate all negative self-talk – We can’t say this enough, but how you talk to yourself – your internal self-dialogue – shapes external outcomes. Replace any negative thoughts with affirming, constructive language. Be open to criticism and improvement, of course, but never denigrate yourself. Otherwise, you’ll become your own worst enemy. This business is built on confidence. To show others you’ve got it, first, you must have confidence in yourself.

3. Focus only on what you can control – The past and future are distractions. To execute well, you must live in the present. We agents waste energy when we obsess over outcomes rather than actions. By narrowing attention to controllable behaviors – daily activity, effort, and follow-through – progress becomes consistent and measurable, regardless of whatever can happen in this business. Because as we’ve clearly seen in the past few years, anything can happen!

4. Celebrate small wins to sustain momentum – Don’t wait for “big wins” before you celebrate your victories. That can only damper your motivation. Instead, start celebrating the small victories in your life. Progress is built through small, repeatable victories: conversations, meetings, and daily execution. Recognizing these moments reinforces positive behavior and maintains momentum during slow or challenging periods.

5. You build resilience and confidence through repetition and practice – Don’t psych yourself out. Nobody is born with mental toughness; it’s something you build throughout your life. Once you accept that setbacks are a part of this business, and your journey as an agent, nothing will ever hold you back for long. In fact, as our old friend Epictetus once said, “Men are disturbed not by things, but by the view which they take of them.” 

We explore these themes and more here on Rise Above the Ranks. We hope you listen because we think you’ll get a lot of it. Use it as part of your prep for next year. 

We’ll be back in your inbox on Tuesday, January 6th, 2026, with the latest information, industry insights, and career-making tips you need to be at the top of your game. 

Before we head out for the year, we want to thank you for helping us build this community from the ground up. It’s been an exciting journey so far, and we can’t wait to see what next year will bring. Have a wonderful holiday season. We look forward to seeing you all in 2026!!!

- James and David