2026 Housing Market Pt 2 - Show me the Data

I wanted to share some examples of data and trends that I track & follow, that form the basis of what I think is going to happen with the real estate market.  There are certain companies and analysts that I have been following for the past 5+ years that are just "right" all the time, and avoid the doomsayers that post the most extreme headlines for clickbait.  

My philosophy for buying and selling has been consistent, and I still believe that Buyers should get into the market as soon as possible, and when they are ready.  Buying a single family home is not an "investment" so it really doesn't matter when you buy.  It's more important when you sell (a longer horizon like 7-10 years will minimize your risk and chances are the property will appreciate) and also important where and why you want to buy.  For me personally, owning a home means "forced savings" - I am paying down my mortgage, building equity, plus there are tax benefits and appreciation. Other non-financial benefits include lifestyle and pride of ownership. I was a renter for about 10 years before buying my first home at age 32. During that time I did not have much money in the bank and was living paycheck to paycheck, spending almost everything I made on nice clothes, vacations, and a comfortable lifestyle.  (Luckily Melissa and I were contributing to our 401Ks, which would prove a great investment later on.)  Anyway, after buying my first house my mindset changed and I started to spend my money differently. As the years went by the house appreciated, I built up equity and increased my networth, and then after getting my real estate license I started investing my money more heavily into real estate, and for me, none of that would have been possible without being a homeowner.  So I'm a big supporter of homeownership, and I think it's important especially for younger people to own their homes.  I don't think the American Dream is dead, but unfortunately affordability is becoming a huge obstacle to that, so younger people will either need help from parents, getting creative like exploring co-owning or multi-family properties (live in one unit, rent out the other(s), or considering moving into more affordable neighborhoods or fixer-uppers for that 1st starter house.

The "Cost of Waiting" is a real thing.  We like to talk about the real estate escalator and getting on it as soon as you can, since over the long run, real estate values go up.  The big price drops that many influencers were threatening never happened but instead we saw steady home value appreciation these past several years in most markets.  My advice has been to buy a house now, even at a higher interest rate, make sure it's a house you like and can afford, get the best possible deal on the price and closing costs, and then refinance later when the % rates come down.  We just saw 5.99% which is AMAZING and will increase consumer confidence.  Buying and selling is emotional, and we have been missing those low % rates.  Nobody was excited to buy at 7% rates, many people were fine with 6% since that is around the historical national average, but 5% just "feels good".  

More headlines, that I think are true. I think 2026 will be a more "normal" year in terms of sales volume and a great time for Buyers and Sellers to transact.  More than 30% of sellers own their homes outright, and most sellers have lots of equity in their homes, so they will do well even in this slower market.  The COVID-market was unnatural and an "artificial" market created by super-low interest rates, severe inventory shortage, and fueled by high emotions.

I think with the interest rates Finally going below 6%, we will see increased activity in new builds but we are still way behind on the amount of new construction needed (especially in the Northwest) to keep up with Buyer demand.  It will be interesting to see if the new building codes in Seattle will increase that missing middle housing, by allowing owners and developers to build ADUs and backyard cottages more easily.

This is not a good trend but understandable with how home prices have surged. When we bought our first house in Seattle (Magnolia) you could get a starter home in 2011 for $400K.  That same house is now $1.2M (3x's the price).

I think the % rates could come down closer to 5.75% but will most likely be in that 5.8-6% range for most of 2026.  Lower the better!

Home values nationally have been on the rise, and I think will continue to rise (slowly).

Interesting to see where home values are going up, or down.

I follow NAR's chief economist Lawrence Yun and well as local economist Matthew Gardner, both have great analysis and have been right the majority of the time. They know what they are talking about.

I think most people are feeling better about tariffs and inflation, versus this time last year when there was more speculation and fear on what would happen with the trade wars.

Logan has great data and charts he shares, and his analysis is spot-on! Definitely a great source of real estate data I use to help my clients make the best possible, informed decisions about their real estate goals.  Let's Connect