US Home Sales Seen Falling to 4.7 Million as Mortgage Rates Stay Above 6%
Updated
Updated · Business Insider · Aug 18
US Home Sales Seen Falling to 4.7 Million as Mortgage Rates Stay Above 6%
3 articles · Updated · Business Insider · Aug 18
Summary
Capital Economics expects 2026 US home sales to slump to about 4.7 million, putting the market on track for its weakest year since 2011 after a brief 2025 recovery faded.
A 6.67% average 30-year mortgage rate and a 4.74% 10-year Treasury yield are keeping buyers sidelined and existing owners locked into cheaper loans, with the firm expecting another 75 basis points of Fed hikes by early 2027.
Home prices are forecast to be flat this year—0% growth, the slowest in 15 years—before a modest 2.5% rise in 2027 and 4% in 2028, making this the weakest three-year stretch since 2011.
A deeper slide is not the base case, but Capital Economics said a 20% S&P 500 correction by late 2027 could further dent housing demand; a sharper housing downturn would likely require a recession, which it does not expect.