The Market Just Lost 70% Of Its Expected Growth. Now What?

For many agents, it’s been difficult the last few years. Transactions are slower, there are fewer of them and commissions seem to be squeezed more and more.

So I was very excited, when, earlier this year, NAR Chief Economist Lawrence Yun was forecasting a 14% increase in existing home sales for 2026. Yay! However, (cue ominous dark cloud and thunder sounds) this week, at NAR Midyear in DC, that forecast was reduced to 4% growth. Ouch. That stings.

Now, to put a positive spin on it, 4% is still growth, just not sexy growth. In a market that has spent the last several years fighting high rates, affordability challenges, and low inventory, growth is certainly welcome. However, when you step back and look at the numbers, more than 70% of the anticipated recovery just effectively … disappeared.

The industry headlines now focus on the 4% growth forecast, to make us feel warm and fuzzy. Rightfully they will also point out the $16,000 in housing wealth the average homeowner is projected to gain this year. All of that matters. What matters just as much, however, is understanding why the forecast changed so dramatically in the first place.

What’s particularly frustrating is that this wasn’t a forecast revision caused by something happening inside the housing market itself. Inventory has actually improved in many markets, homeowners continue to build equity, and demand has increased like pressure behind a dam.

Instead, much of the downgrade can be tied to geopolitical events. As conflict with Iran pushed energy prices higher, concerns about inflation returned, Treasury yields rose, mortgage rates moved higher than many economists expected, and a meaningful portion of the anticipated housing recovery was pushed further into the future. Housing didn’t suddenly become less important to consumers, but once again it found itself reacting to forces far outside the industry’s control.

Whenever growth slows, I find it useful to ask a simple question: if the market isn’t going to deliver the opportunities we expected, where are those opportunities going to come from instead?

Buyers are Outliers?

NAR Deputy Chief Economist Jessica Lautz made the observation that we spend an enormous amount of time talking about first-time homebuyers, but very little time talking about first-time home sellers or seller leads.

I identify with and really like this thought.

Every first-time buyer eventually becomes a first-time home seller, yet most of the industry’s marketing, technology, and lead generation efforts remain focused on acquiring new relationships rather than understanding the relationships agents already have. If the market is only going to give us 4% growth instead of 14%, perhaps the answer isn’t finding more people. Perhaps it’s doing a better job identifying opportunities that already exist.

The first-time home seller lead is a perfect example. Unlike an experienced seller who has been through the process multiple times, a first-time home seller is navigating unfamiliar territory. They have questions about repairs, pricing, negotiations, timing, moving, taxes, and what comes next. In many ways, they’re standing in the same shoes they wore when they bought their first home years ago, except this time they already know a real estate agent, or at least they should.

The challenge is that most first-time home sellers don’t announce themselves six months before they move. What they do instead is live through a series of life changes that gradually push them toward a real estate decision. A growing family, a new job, a retirement, a divorce, an aging parent, a relocation opportunity, or simply the realization that a home no longer fits their needs, often starts the process long before a homeowner ever reaches out to an agent.

That’s one of the reasons I’ve long believed that the biggest opportunity in most databases isn’t finding more people, it’s understanding what’s happening with the people you already know.

Over the years at Revaluate, one of the more surprising things we’ve discovered is how many transactions occur inside an agent’s existing database without the agent ever knowing the opportunity existed. Not because they weren’t paying attention, and certainly not because they weren’t working hard, but because they had no visibility into who was entering a decision-making phase until after the decision had already been made.

When the market is growing rapidly, those missed opportunities are easier to overlook because new business is constantly appearing. When expected growth gets cut by more than 70%, every missed opportunity becomes more significant.

I suspect that’s the real takeaway here. If the market isn’t going to provide the recovery many agents hoped for, then success will increasingly belong to the agents who understand their existing relationships better than their competitors do. The next seller lead or listing may not come from a lead form, a postcard, or an internet lead. It may come from a first-time home seller who is already in your database, already moving through a major life transition, and already deciding who to call.

If you’d like to see the seller lead transactions that happen in your database, (with or without you) get a free real estate database audit.