The housing market in 2025 has been a bit stuck, with high prices, low inventory, and current home owners not wanting to sell and lose their low mortgage rates.

But mortgage applications have been ticking up recently compared to this time last year. And the National Association of Realtors predicts next year will be a good one for home sales: The group forecasts 2026 will see a 14% jump in sales.

A lot of folks are getting pretty tired of waiting on the sidelines of the housing market, said Lisa Sturtevant, chief economist at Bright MLS.

“We're sort of reverting back to the mean, and it makes sense to see more sales next year because of pent up demand,” she said.

"There’s also a psychological barrier, said Anirban Basu, CEO of Sage Policy Group. And that’s the interest rate on a 30-year fixed mortgage. It’s been hovering around 6.25%, but it could dip below six next year.

“I've spoken to many people who manufactured and install doors, manufacture and install windows, and they really believe that once it falls below that threshold, then the lid will come off the market,” he said.

Especially in the South and Southwest, which have seen more housing construction. Basu said prices in places like Miami and Phoenix have actually been falling, “because those built environments are poised for in-migration.”

Still, affordability will remain a challenge, and could impact who will be buying.

“We have a huge baby boomer population retiring each year,” said Lawrence Yun, chief economist with NAR. Often, with equity in a home already.

That used to mean retirees buying in warm, sunny locales, Yun said, but that’s not always the case anymore.

“Some people go to Arizona, some people go to Florida, but surprisingly large number was to be near where their grandkids are located,” he said.

Yun’s group has dubbed this “the grandbaby effect.”

But for first time buyers, who have just regular babies, or none at all, and no equity built up?

“Sadly, I don't see a lot of relief for the entry level of the market,” said Michael Orbino, a real estate agent in Bellevue, Washington.

He expects a jump in sales. But he said that’ll be driven by high-end buyers. 

“And so, that that old discussion of is it a better time to rent versus buy? I don't know that that's a universal answer,” Orbino said. With rental costs ticking down, some renters might prefer to sign that lease for one more year.