The National Association of Realtors (NAR) is calling for a 14% increase for existing home sales in 2026, a forecast that flooring executives say they would love to see but cast serious doubt on happening.
“Next year is really the year that we will see a measurable increase in sales,” Lawrence Yun, chief economist for NAR, said in delivering the association’s Housing Outlook for 2026.
Yun said the expected rebound reflects easing mortgage rates to around 6%, continued job gains and improving market stability after several challenging years. “As we go into next year, the mortgage rate will be a little bit better,” Yun said. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”
Existing home sales is perhaps the most important housing metric for the flooring industry as it sometimes represents two transactions—one from both the seller and the buyer.
NAR forecasts home prices to increase by 4% next year, supported by steady demand and persistent supply shortages.
Industry reaction
While welcoming positive news on the housing forecast, no one in the flooring industry that FCNews spoke to expects anything close to a 14% increase in 2026. Several distributors lowered their expectations for 2026 based on ITR Economics’ Brian Beaulieu’s address at the NAFCD show in Chicago.
Torrey Jaeckle, vice president of pricing and procurement for Jaeckle Distributors, Madison, Wis., cited ITR’s 12/12 rate of change (which compares the most recent 12 months of activity to the previous 12 months to reveal underlying cyclical trends) in his comments. “We’ve recently seen the 12/12 rate of change tick back up into positive territory for the first time since early 2022 (along with the overall U.S. data), and although I do expect additional rise, a 14% rise seems a bit overly optimistic to me,” Jaeckle said. “Currently the differential between the 30-year mortgage rate and the 10-year bond yield is in territory that suggests significant headwinds for housing. While I would love to see a 14% rise, I am not expecting that level of increase myself.”
Jaeckle’s sentiments were echoed by others, including Matt Hafer, president of Carrollton, Texas-based distributor Adleta. “As far as the forecast, that strikes me as very aggressive, especially with the comments from ITR,” Hafer said.
Several retailers said that while the 14% housing forecast was “too bullish” or “overly optimistic,” a rise in existing home sales is not out of the question for next year based on what they are seeing today. “Our store traffic has been at a record high for this time of year,” said Deb DeGraaf, co-owner, DeGraaf Interiors, with two Michigan locations. “Our installation schedule is booking well into 2026, so I believe these are sure signs good growth is possible to finish out the year and start the first quarter. Our two retail locations are seeing great traffic. One is better than the other because it has only been open for one year and it is in a very good spot with a lot of exposure on a main road.”
With nine locations in Iowa and Illinois, Carpetland USA (The Langan Group) typically sees a mixed bag when it comes to real estate trends. “In our larger markets, I would say the housing trends are better than our smaller markets, but a double-digit increase seems to be a bit bullish to me,” said Eric Langan, president/owner. “Also, being in the Midwest, we typically find ourselves a little behind or late to see national trends. Any increase is surely welcomed. I just think a double-digit increase in our markets is a bit of a reach.”
The Flooring Edge, with three Ohio locations, has seen existing home sales “up a tick” despite better retail traffic. “The major issue facing housing is that homeowners are locked into substantially lower mortgage rates in the low threes,” said Craig Phillips, vice president. “This will continue to impact sales of existing homes. There is a sentiment that it doesn’t make sense to get out of the lower rate. So, I think a 14% increase seems a little steep, but I hope they are right.”
Others share in the optimism as well, even if a bit rose-colored. “There is no question there is a shortage of housing,” said Scott Rozmus, president/CEO for FlorStar Sales, Romeoville, Ill. “Likewise, if mortgage rates decline, that should incentivize some potential buyers who are on the sidelines to take the plunge.”
NAR’s Housing Outlook for 2026 delved into the demographics behind its sales numbers. Among the findings:
First-time home buyers
- First-time home buyers shrank to a historic low of just 21% of all buyers in 2024. Prior to 2008, the share of first-time buyers had a historical norm of 40%.
- While the share of first-time buyers is at its lowest level, the age of first-time buyers has risen to the highest recorded. The median age of first-time home buyers is now 40. In the 1980s, the typical first-time home buyer was in his/her late 20s.
Repeat home buyers
Highlighting the rupture in the housing market is the changing landscape for a repeat home buyer. Repeat buyers can enter the housing market with large down payments (median of 23%).
- 30% paid cash and did not finance their home. Repeat buyers have continued to earn housing equity as home prices increase.
- Home sellers have owned their home for a record high of 11 years before selling.
- Baby boomers are dominating the housing market, often buying with cash or tapping the substantial home-equity gains they’ve built over years of ownership.
Household composition
- Among all home buyers, 61% are married couples, 21% are single women and 9% are single men.
- Among first-time buyers, 25% are single women and 10% are single men; the share of married couples remained flat at 50%.
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