Blog: Residential Construction Trends, 2026 Forecasts
Blog: Residential Construction Trends, 2026 Forecasts
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Residential construction spending continues to shift as economic conditions evolve. According to the latest U.S. Census Bureau data, private residential construction increased 0.8% in August 2025, extending the steady growth observed since early summer (U.S. Census Bureau, 2025). Despite this monthly improvement, total residential spending remains 2% below last year, influenced by elevated mortgage rates and ongoing tariff uncertainty.
Single-family construction declined 0.4% for the month and is down 1.1% year over year.
Remodeling (“improvement spending”) increased 8.2%, supported by strong homeowner equity.
Multifamily construction posted a modest 0.2% gain, although it remains 7.1% below last year’s levels.
These data points align with the subdued builder sentiment reflected in the NAHB/Wells Fargo Housing Market Index (NAHB, 2025).
NAR Forecast: Home Sales Expected to Rise 14% in 2026
According to National Association of REALTORS® Chief Economist Lawrence Yun, existing-home sales are projected to increase approximately 14% in 2026. The expected improvement is driven by:
Moderating mortgage rates (averaging around 6% in 2026)
Continued job growth
Gradually stabilizing market conditions
Home prices are forecast to rise approximately 4%, with no national declines expected (National Association of REALTORS®, “Home Sales Expected to Jump 14% in 2026,” 2025). Regions with robust new construction—such as Houston—are positioned to experience the largest affordability gains as inventory expands.
Shifts in Buyer Demographics
Jessica Lautz, NAR Deputy Chief Economist, highlighted significant changes in who is buying:
The typical home buyer is now 59.
The typical repeat buyer is 62.
The leading reason for moving is to be closer to family, often referred to as the “grandbaby effect.”
Meanwhile, first-time buyers continue to face affordability challenges, now representing only 21% of all buyers, the lowest share on record (NAR, 2025 Profile of Home Buyers and Sellers). Notably, 88% of buyers and 91% of sellers used a real estate professional in their latest transaction.
FSBO Share Falls to an All-Time Low
For Sale By Owner (FSBO) transactions dropped to only 5% of home sales, the lowest level ever recorded (NAR, 2025).
Key findings:
Median FSBO sale price: $360,000
Median agent-assisted sale price: $425,000
Price gap: 18% in favor of agent-assisted sales
Clever Real Estate’s FSBO survey reports:
Over 50% of FSBO sellers found the process stressful
43% made legal mistakes
Nearly 30% struggled with pricing
64% did not achieve their desired price
About 1 in 5 eventually hired an agent
Sellers overwhelmingly cite pricing strategy, marketing exposure, negotiation expertise, and transaction management as the primary reasons for choosing representation. According to NAR, 87% of sellers would recommend their agent. The residential real estate market continues to demonstrate resilience, and data indicate renewed growth ahead. Remodeling demand is strong, new construction trends are stabilizing, and 2026 is positioned to deliver meaningful increases in home sales. At the same time, the record-low FSBO rate reinforces a clear reality: today’s market is complex, and professional representation consistently delivers stronger outcomes. Click Here to View Our Design to Sell Brochure
A new survey from the National Association of Realtors® reveals that home staging continues to be a significant part of the home buying and selling process.
"Staging a home helps consumers see the full potential of a given space or property," said Jessica Lautz, NAR's vice president of demographics and behavioral insights. "It features the home in its best light and helps would-be buyers envision its various possibilities."
Buyers' agents overwhelmingly agreed, as 82% said staging a home made it easier for a buyer to visualize the property as a future home.
These agents also said that visuals themselves are helpful, even more so about buying a house during the coronavirus outbreak. Eighty-three percent of buyers' agents said having photographs for their listings was more important since the beginning of the pandemic. Seventy-four percent of buyers' agents said the same about videos, and 73% said having virtual tours available for their listings was more important in the wake of COVID-19.
"At the start of the pandemic, in-person open house tours either diminished or were halted altogether, so buyers had to rely on photos and virtual tours in search of their dream home," said Lautz. "These features become even more important as housing inventory is limited and buyers need to plan their in-person tours strategically."
Staging also increased the sum buyers were willing to spend for a property, according to the report. Twenty-three percent of buyer's agents said that home staging raised the dollar value offered between 1% and 5%, compared to similar homes on the market that hadn't been staged.
Coincidently, the response from sellers' agents was nearly identical, as 23% reported a 1% to 5% price increase on offers for staged homes. Eighteen percent of sellers' agents said home staging increased the dollar value of a residence between 6% and 10%. None of the agents for sellers reported that home staging hurt the property's dollar value. Moreover, 31% said that home staging greatly decreased the amount of time a home spent on the market.
Exactly which parts of a home to stage vary, although living rooms (90%) and kitchens (80%) proved to be the most common, followed closely by master bedrooms (78%) and dining rooms (69%). As many workers were forced to work from home due to the pandemic, 39% staged a home office or office space.
Eight-one percent of those surveyed said buyers had ideas about where they wanted to live and what they wanted in an ideal home (76%) before they began the buying process.
Forty-five percent of surveyed Realtors® said they have seen no change in the share of buyers who planned to flip a home in the last five years, while 42% said they had. Also, 59% said they have seen an increase in buyers who planned to remodel a home in the last five years, while 34% said they have seen no change. Agents surveyed said that typically 25% of buyers who plan to remodel will do so within the first three months of owning their home.
Click here to learn more about our services: Design to Sell Brochure
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