Existing home sales beat estimates, what it signals for 2026

Existing home sales beat to the upside today, which is not shocking for those who follow our Housing Market Tracker, as most of the tracker article headlines have shown that housing demand is holding up this year. The question is whether this growth can last amid higher mortgage rates, and why sales haven’t been hit as much by higher rates in 2026 as in previous years. I do have an explanation for this, so we can make sense of what is going on in 2026.

Existing home sales

From NAR: Existing-home sales increased by 3.2% month-over-month and year-over-year, according to the National Association of REALTORS® Existing-Home Sales report. The report provides the real estate ecosystem—including agents, homebuyers and sellers—with data on the level of home sales, price, and inventory.

First, I want to remind people that NAR tends to have more revisions lately, so when we beat to the upside in a big way or miss estimates to the downside in a big way, there will likely be a minor revision to the number in the next report. Even so, it isn’t shocking to see this growth; our weekly tracker data has been mostly positive all year long. 

We had a series of events that slowed things down early in 2026, including Christmas and New Year’s falling on Wednesday, an epic snowstorm, and higher mortgage rates due to the Iran conflict. Still, housing demand has held up ok this year, as our weekly pending home sales data shows. Mind that this data line takes 30-60 days to reflect in the sales data.

Our total pending sales data has shown year-over-year growth since the end of March. Mind that the epic snowstorm really did a number on home sales in March for the states that got hit.

Mortgage purchase application data has been showing growth on a year-over-year basis for almost every week this year.

Most of the growth in purchase applications is due to better mortgage spreads this year, which have kept mortgage rates below 6.64% for most of the year. Why is that important? Because housing data tends to do better when mortgage rates are below 6.64% and head toward 6%.

Can it last?

First, let’s bring reality to this picture. Existing home sales are working from the lowest bar ever, so, as I always like to remind people, take any growth you see in context with how low existing home sales are today. We are at the lowest levels of sales ever in history relative to civilian labor force growth.

We tend not to have a calendar year of sales below 4 million after 1996, regardless of what’s happening with the economy. So, 2026 data was working from a low bar, as it should have, because affordability has only slightly improved recently. 

As long as wages grow faster than home prices and mortgage rates stay near 6%, this sales growth can last as affordability improves over time. It’s a very slow-moving process, but a process that history shows we can grow sales in the future.

If mortgage rates rise above 6.75% and head toward 7% as they have in the past few years, sales tend to fade, and this conflict isn’t helping. Again, however, better mortgage spreads this year have prevented mortgage rates from being above 7%. If this were 2023, 2024 or even 2025, mortgage rates today would be between 7.20%-7.75%.

Conclusion

Existing home sales beat the estimate today. We have year-over-year growth in sales, and even the first-time homebuyer percentage grew from 30% to 35% — one of the highest first-time homebuyer percentages in the past 10 years. How is that possible? I call it the denominator factor. 

When mortgage demand is growing, it tends to increase among first-time homebuyers, since they finance 93% or more of their home purchases. As we have seen mortgage demand grow a little, we have seen a slight increase in first-time homebuyers this month. Try not to make too much of this — I know it shocked a lot of people today but it is more of a denominator factor than real growth. 

I’ll be keeping an eye out on weekly data to see if higher rates slow things down, but for now, housing has done ok with higher rates in 2026.