Year-End Market Analysis

As a real estate agent, 2026 likely holds a lot of uncertainty and ambiguity. Without information, you’re flying in the dark. That’s why it’s important to understand the trends of 2025 going into the new year.  

In this blog, we delve deeper into the dynamics of the 2025 real estate market, going over insights and speculating on its future outcomes. We’ll also outline practical next steps, from strategy shifts to online pre-licensing courses for those entering the field. 

A Recap of the 2025 Housing Market

In July 2025, national home prices rose by 1.1% year-over-year. Prices fell 0.3% month on month, suggesting that the market is cooling off going into the new year. 

You’ll hear us say this a lot in this article, but the demand for homes outpaced the supply. Many homeowners are choosing to stay in their current homes due to high mortgage rates. Their reluctance or inability to sell has really driven the ongoing inventory shortage we’ve seen this year.  

Summer is usually the hottest time to buy and sell in the real estate industry, but from April to August 2025, market activity was low. Despite efforts to fulfill the increasing demand for single-family homes, new home developments still didn’t meet market expectations. 

This was driven by a few major influences, such as: 

• Increasing Rates for Mortgages: Since the start of the year, mortgage rates have been on the rise. Home financing has become even more expensive as a result. 

• Pressures from Inflation: Rising living expenses from inflation have reduced homeowners’ purchasing power. 

• Reduced Supply: There are still not enough houses on the market to satisfy the demand from buyers. 

According to the Federal Housing Finance Agency (FHFA), house prices increased 2.9% from the second quarter of 2024 to the second quarter of 2025, with a small 0.2% decrease from May to June 2025.  

The median existing-home sales price hit a record high of $435,300 in June 2025, despite a 2.7% decline in existing-home sales, according to the National Association of Realtors (NAR). 

Overall, the 2025 housing market was marked by a slowdown in the growth of home prices and a decline in home sales due to rising mortgage rates, inflationary pressures, and a limited housing supply. 

Evolution of Mortgage Rates in 2025

More than in previous years, in 2025, mortgage rates played a big role in the real estate market. Inflation, the current Federal Reserve Policy, and the state of the economy are all major factors in influencing 2025 mortgage rates and beyond.  

While big drops aren’t expected, we can still expect to see small declines in mortgage rates going into 2026. For example, by late 2025, Fannie Mae and others are projecting rates around 6.5%.  

With the economy still uncertain, most predictions will keep shifting as new data comes in. So, it’s worth keeping clients updated throughout the year. There is plenty to stay optimistic about. 

New Construction, Inventory, and Affordability in 2025

Since the pandemic, we have seen a lot of highs and lows in the real estate market. In 2025, the market was deeply affected by problems with affordability, a lack of inventory, and a major dip in new construction. Rents are also expected to keep going up through 2026 and 2027, demonstrating a high level of continued demand.  

Inventory has been a huge problem this past year. Buyers want to live in certain areas, and there are just not enough properties on the market. With inventory so tight, that means entry and mid-level price ranges are hit the hardest.  

This pushes prices higher and makes affordability difficult for first-time buyers. However, creative alternatives such as modular housing and mixed-use developments are popping up in several cities. These new, innovative housing alternatives can help to alleviate the inventory shortages while providing more affordable options in the future. Buyers who consider modular housing and mixed-use developments have access to homes that they might not otherwise afford. 

While over 75% of American households struggled to purchase a new home in 2025, these conditions also provide a competitive market for real estate agents to advise clients on smart buying techniques. Even when the market is tight, agents can help buyers come up with creative solutions if they plan ahead, know the market well, and keep an eye on new housing opportunities. 

Top Real Estate Markets to Watch in 2026

At a Glance: 

Cities go in and out of vogue all the time. Twenty years ago, people were packing up for the Sun Belt. These days, a lot of people and families are moving to areas that provide a high standard of living, reduced costs of living, and economic growth. Here are the real estate markets that are projected to expand by leaps and bounds in 2026:  

Charlotte, North Carolina 

Charlotte’s strong economy, good infrastructure, and steady growth make it an attractive market for buyers and agents, with even more growth expected in 2026 

Nashville, Tennessee 

There is more to Nashville than just music. The city's thriving economy, fueled by healthcare, tourism, and tech, is attracting new residents, presenting a promising real estate market. 

Austin, Texas  

Austin continues to draw homebuyers as a tech hub with healthy job growth. Price increases will continue to be driven by demand for suburban real estate. Competition may be tough, but if you're up for the challenge, there is a big chance for strong returns.  

Setting aside the big-name city markets, Idaho is quietly shaping up to be a hidden gem in the real estate market for the coming year. Idaho is leading the country in new home construction with more than twice the national average. For every 1,000 homes that already exist in the state, about 21 new homes are being added each year. With so many new homes being built, that means there’s more inventory for buyers. If you play your cards right, that can easily lead to a big commission for you as an agent.  

2026 Projections

The market is shifting from volatility to steady growth. Zillow sees a modest 0.4% uptick in home values from July 2025 to July 2026, CoreLogic pegs 2025 prices up 4.1% with further gains ahead, and NAR forecasts median prices climbing 3% in 2025 and 4% in 2026. 

Norada Real Estate Investments suggests that the market will experience: 

• A small spike in housing prices 

• An increase in housing supply  

• Mortgage rates will continue to rise  

• A competitive housing environment 
   

All of these indicators suggest a tentative but positive view for the housing market in 2026. 

Preparing for the New Year With Agent Campus

The 2025 real estate market was shaped by rising home prices, fluctuating mortgage rates, and changing buyer expectations. All of these factors presented both new challenges and possibilities for agents. Keeping up to date as we move into 2026 is essential for new and seasoned agents alike.  

For those looking for a career in real estate, let 2026 be the right year for you to secure your real estate license. For those who are already experienced experts, you should ensure your licenses are up to date through Real Estate Continuing Education. 

Get ready for a successful 2026 with the expertise of Agent Campus by 360training!