- by Anthony Lamacchia
ANTHONY LAMACCHIA'S
2026 REAL ESTATE MARKET
PREDICTIONS
We have made it to the end of 2025, a year riddled with industry headlines about tariffs, the new Trump Administration, major trade and national economic changes that seems to have been met with incredible market resilience. Despite all that 2025 will go down in history as the pivot year where the Real Estate market began to head back in the right direction! Inventory of homes for sale has finally gone up a sizable amount and is at the highest levels of homes for sale since 2019 in Massachusetts, Maine, New Hampshire and South Florida. Connecticut and Rhode Island still have extremely stubbornly low inventory of homes for sale. Those two states tend to lag Massachusetts by 1-2 years so I do think we will see inventory rise in both Connecticut and Rhode Island in 2026.
Total Home Sales
One year ago today when I released my 2025 Predictions I said that “2024 will go down in history as the bottom of the bottom of this down cycle”. I went on to present my predictions for 2025 and stated what would happen for home sales;
“As rates lower and the number of homes for sale increases, we expect sales to rise. I predict sales will rise by somewhere between 5% to as much as 10% in 2025.”
So far, we only have 2025 sold data until the end of November, so our comparisons are measuring change up until November 30th versus all of 2024. December has all the signs of being a big month so I feel strongly that overall sales will be up at least 5% over 2024 when the numbers are final. The reason I am so confident about this is that November had many sales move into December due to the late Thanksgiving and November 30th being on a Sunday. The government shut down all of October and the beginning of November also made November a poor month. So far this month sales are way up compared to the last four Decembers, and I think that will be reflected when the numbers are finalized in a few weeks.
Florida may be the only exception where it appears that 2025 may be the bottom of the down cycle where in New England 2024 was the bottom. This official data will be presented in late January in our annual Year in Review reporting.
I strongly believe that mortgage rates will continue to trend downward. This tells me that more homeowners who are want to be sellers will come off the sidelines and get into gear in 2026. Many of these sellers will also be buyers. This is the opposite of what the market has been experiencing for the last 3.5 years, and it has already started. This shift, combined with an improving economy in 2026, I am confidently predicting that sales will be up at least 10% on average in Massachusetts, New Hampshire, Maine, Connecticut, Rhode Island, and South Florida.
Mortgage Interest Rates
I suspect mortgage rates will settle in the mid to low-5% range by the end of 2026, offering buyers additional affordability and sellers more temptation to sell and trade up to a bigger home. If we hit that level, which will be the lowest in years, the golden handcuffs of that pandemic era mortgage rates will really begin to open and create more home seller activity in the market providing more selection for buyers.
Average Home Prices
With mortgage rates adjusting back to a more palatable number and sellers coming off the sidelines as a result, inventory will be higher than what we have seen in years. That said, supply will still be lower than demand for most of the year so I do predict prices will continue to rise, albeit at a more measured pace. That added inventory will keep somewhat of a cap on prices and prevent them from rising too much. I am predicting a 4% increase in the average price of a home in all of our markets in 2026.
Now, let’s rewind briefly and see how my 2025 predictions that I had released one year ago today stacked up against what actually happened.
Review of my 2025 Predictions
Overall Sales
Prices
My prediction for average price increases seems like it will also come in where I had predicted for Massachusetts and surrounding states when I said,
“In New England…I expect modest growth in average sales prices of about 2-8% in 2025.” As you can see in the chart below prices are up 4% as of November 30th.
However, in South Florida it doesn’t appear that I was as accurate with condos as the market continues to defy logic! … I had said
“As for South Florida, condo prices will be at least 1-3% lower. Single-family homes will continue to hold strong and likely continue to experience some appreciation in pricing, but not as much as in 2024.”
I was correct on the single families but wrong on the condos. Yes, certain complexes did lose value but there is so much new construction closing that it held the average up. South Florida has turned into more than a vacation and retirement destination and that is showing in the stats with inventory adjusting higher but average prices not going down.
Look at this 2024 to 2025 comparison for all the states we operate in up until November 30th prepared by Cole Gargaro:
Note: All charts in this post compare all of 2024 performance to November 30th, 2025. There is still one more month of activity, so they don’t reflect the total performance of 2025 entirely. That information will be released in January and covered in our state Year in Review reporting.
Rates:
2025 experienced a sizable decline in mortgage rates having started the year with an average over 7% and now ending the year at about 6.2%. This unlocked some affordability constraints for buyers and helped boost market activity since June.
At the end of the day, 2025 was certainly an adjustment year that set the stage for a healthy 2026. We are on the other side of this down cycle and are on our way back to a steady and active real estate market in the years to come. 2026 will get us halfway back to the normal amount of annual home sales, and in 2027, I strongly suspect we will be back to a normal annual amount of homes sales. 2028-2029 I believe we will exceed normal levels and likely break records by 2029 and or 2030!
Happy Holidays and Happy New Year!
Note: Many of these 2026 predictions and observations apply nationally on many levels. Though real estate markets can vary from one local market to another, most of the overarching market trends are happening everywhere on a grander scale right now. For those reading these predictions outside of New England or South Florida, much of this will likely be applicable to your market unless you are in a unique place with outlying factors.
Additional Resources
