Shannon Herrmann, a LO based in Montana, predicts a shift in the housing market. She believes that home sales will increase steadily and mortgage rates will decrease by the third quarter of 2026 after hitting a bottom for housing stagnation.
According to a survey, move-up buyers are expected to have the strongest outcomes in the upcoming year, with 39% of lenders foreseeing positive results for this group. On the other hand, first-time buyers are likely to face challenges due to high prices and difficulty saving for down payments.
With rising personal debt, some prospective buyers are exploring co-buying or nontraditional arrangements such as purchasing a home with friends, family members, or investors. Non-occupying co-borrowers and gifts from relatives are also becoming more common.
Despite the obstacles, lower mortgage rates may encourage hesitant buyers to take the leap into homeownership. Dennis Bergstrom, a seasoned loan officer, believes that lower rates will motivate fence-sitters to purchase their first home.
AI tools are expected to streamline the mortgage application process, making it more efficient for borrowers and loan officers. Additionally, buy-before-you-sell programs are anticipated to gain popularity as a form of alternative financing.
Richie Helali, HomeLight’s enterprise sales manager, emphasizes the importance of timing in real estate transactions. He recommends buy-before-you-sell programs for homeowners looking to make a smooth transition to their next property.
Industry experts advise prospective buyers to act promptly. Loan officer Steve Farrington warns that those who delay purchasing a home may regret their decision by mid-2026. For younger buyers, starting small and seeking professional guidance for long-term planning are recommended strategies.