Housing Market Rebound Ahead? Economist Lawrence Yun Thinks So

As we reach the midpoint of 2025, the real estate market continues to evolve amid shifting mortgage rates, inventory fluctuations, and broader economic trends. Lawrence Yun, Chief Economist at the National Association of REALTORS®, recently shared a hopeful outlook during the July 2025 Real Estate Forecast Summit. According to his data-driven analysis, the housing market is showing signs of stabilization and appears to be setting the stage for growth, especially heading into 2026.

Here are the key takeaways from Yun’s forecast and what they could mean for buyers and sellers in the months ahead.

A Gradual Rebound in Home Sales

While the year started off slow, with existing-home sales down 2.7% in June due to limited supply, Yun projects a 3% increase in existing-home sales for the full year. He anticipates a much stronger 14% jump in 2026. New-home sales are also expected to rise 5% in both 2025 and 2026, signaling increased builder confidence.

For buyers who have been waiting for more options, this could mean greater inventory and less pressure to compete. For sellers, the projected increase in demand points to more active market conditions, making now a smart time to prepare for what’s coming.

Home Prices: Slower Growth Creates Opportunity

After years of significant price growth driven by underbuilding, home prices are beginning to level out. Yun forecasts just a 1% increase in median home prices this year, followed by a 4% increase in 2026. This slower pace of appreciation, combined with wage growth outpacing inflation, is improving affordability.

Yun notes that if mortgage rates fall from 7% to 6%, an estimated 5.5 million additional households could qualify to buy. That shift alone could add roughly 550,000 home sales over the next 12 to 18 months. A one-point rate drop may seem small, but it could make homeownership more achievable for many.

Mortgage Rates and Inventory Are the Key Factors

Yun expects mortgage rates to average 6.7% in 2025 and fall to around 6.0% in 2026. That 6% mark is what he calls the “magic number” that could spark a wave of buyer activity. Although inventory is rising, many homeowners are still hesitant to list their homes because they are locked into ultra-low mortgage rates.

Still, Yun believes demand is waiting in the wings. Serious buyers are actively monitoring the market and inventory is beginning to improve. This gives buyers more breathing room and an opportunity to negotiate, particularly for those entering the market for the first time.

What’s Happening in Utah

Utah is already showing signs of recovery that align with national trends. In June 2025, there were 18,983 active listings across the state, a 23.6% increase compared to the previous year. Utah has now surpassed pre-pandemic inventory levels, giving buyers more choices and shifting some leverage in their favor. The median days on market rose to 56, reflecting a slower but more thoughtful pace in buyer decision-making.

This is not a weakening of the market, but rather a healthy correction. Yun forecasts a 3% increase in Utah home sales this year, with an 8% boost expected in more affordable property types like condos and townhomes. Buyers benefit from increased inventory and more time to act. Sellers still have an edge, especially as rates begin to ease and demand picks up.

A Stronger Economic Outlook

The broader economy is also supporting this housing recovery. Job growth is expected to reach 1.6 million in 2025 and 2 million in 2026. Delinquency and foreclosure rates remain low, and more than 35 million homeowners in the U.S. own their homes outright. These strong fundamentals give Yun confidence in the market’s direction.

He summarized the current moment by saying, “We’ve had the lowest home sales in 30 years for two consecutive years, but there’s a light at the end of the tunnel.” The message is clear: the worst may be behind us.

What This Means for You

Whether you are buying, selling, or just exploring your options, now is the time to position yourself for what’s ahead. The market is stabilizing and conditions are shifting toward opportunity. A clear strategy, paired with expert guidance, can help you make the most of it.

Let’s connect and talk through how this evolving market impacts your real estate goals. I’m here to help you make your next move with clarity and confidence.