Mind the Gap: The State of the Housing Market Mid-2026
As National Homeownership Month begins, it’s eye-opening to realize that this year’s market is historic for many reasons.
1. Record Low for First-Time Buyers, Record High for All-Cash Buyers
According to the National Association of REALTOR’s ® (NAR) Profile of Home Buyers and Sellers, first-time home buyers made up 21 percent of the market in 2025. This is the lowest it’s been since NAR started tracking data in 1981. On top of this, the average age for a first-time buyer is much higher, at 40. The reasoning behind these stats can largely be attributed to high rent, stagnant income, and student loan debt which make it hard to save up for a down payment. Also, inventory remains low while many new buyers are weary of higher mortgage rates making their monthly payments unaffordable.
On the flip side, and potentially as a way to bypass high mortgage rates and finicky lending options, all-cash home purchases have reached a record high of 26 percent, more than double the percentage recorded between the years 2003-2010 (when it was less than 10 percent).
As an agent, this means you’re going to be dealing with financing issues and an evolving understanding of who is a first-time buyer. While there are plenty of people who purchase their first home in their twenties, the data shows that these are not average. Ask yourself, “Is my outreach for this type of client appropriate for someone who is forty?”
2. A Gap in the Market
The rise of interest rates over the past two years has created a widespread buyer’s market, with more people listing their homes than those who are actively seeking to purchase them.
At first glance, this disparity seems huge — but it is starting to shrink. Redfin reports,“There were an estimated 46.5% more home sellers than buyers in the U.S. housing market in April, down from 47.5% the month before and a high of 48.9% in December 2025. It’s still very much a buyer’s market, but it’s no longer a strengthening buyer’s market.”
Buyers are dipping their toes back into housing as the job market stabilizes and the initial shocks of the War in Iran settle.
With this gap and this growth in mind, as an agent you can look at your database and think about those it may be worth re-engaging with. While politics and the economy are always changing, the fear of uncertainty that was so strong at the beginning of the year is settling into a “new normal” where people are certain about the uncertainty. Ask, “Who is feeling more ready, willing, and able to buy?”
3. A Widespread ‘Mismatch’
To better understand the gap between buyers and sellers, NAR and Realtor.com worked together to create an understanding of “Listing-Income Alignment.” Essentially, they studied whether the buyers in a market were able to actually afford the average listings offered in the area.
NAR found, “The housing market continues to face an overall supply shortage, and the existing supply is not aligned with the price points buyers can afford. As a result, many of the homes currently on the market remain out of reach for a large share of potential buyers.”
Closing the gap between sellers and buyers will not simply rest on increasing inventory (as shown by disparity between active listings and buyers); instead it will need to address the affordability of the home for potential buyers.
As an agent, you’ll need to consider whether your listing clients are pricing themselves out of their market. Research the average incomes in your area and look at recent solds. Ask yourself, “Should I be having conversations with my clients about price repositioning?”
Though the 2026 housing market has had its fair share of challenges so far, take heart. As Gary Keller says, “There’s never the wrong time to buy the right piece of real estate.” For those agents who are willing to strategically work their database, there is enough opportunity in any market for them to reach their goals.
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