2026 Housing Market Outlook John Burns Consulting & Research

Buzz Delano

Principal Consultant, Delano Associates

I attended this session to gain perspective and knowledge to share.  Everyone in the smart home profession has a vested interest in the state of the housing market, regardless of the number of homes that we touch through new production, spec, custom or luxury properties. Home building and its affiliated professions affects the mindset of all consumers as they think through their decisions about their current and future home. A poll of attendees was conducted before the session began.

 I encourage you to stay tuned in to the results and trends of the home building market through research firms such as John Burns Research and Consulting, the NAHB and U.S. Census Bureau Construction Spending reports.   Further, keep your relationships strong and thoughtful with your builder relationships.  Ask what they see and share your thoughts and knowledge with them.  Raise the bar on thought leadership conversations with your builder partners.

John Burns Research & Consulting is a research firm specializing in the housing construction market and conducts hundreds of surveys annually with a cross-section of industry leaders, analysts and experts.  https://jbrec.com

The webinar opened with John Burns introducing himself to an audience largely familiar with the firm.  I was heartened by John’s opening comment about the U.S. housing market when he said, “We’re teed up for growth.”  This was good to hear and listening to the forecast reporting data for the following 45 minutes was the key to understanding the relatively optimistic outlook. A poll of attendees was taken on high-level points. Here is the first poll result.

I will summarize a few key points as reported by Burns:

·      18 separate surveys were conducted for the 2026 outlook

·      2026 Outlook: Moderate Short-Term and Better Long-Term

·      Expect Modest Home Price Declines in Most Markets in 2026

·      Short-term: Unsold and overpriced new homes

·      Medium-term: Mortgage rates expected to fall slightly

·      Long-term: Pent-up demand for home demand by “30-somethings”

·      Smaller metro areas will experience growth outside of Austin, Denver, Salt Lake City and Orlando as notable regions for this trend.

Summary was that while still above recent lows, easing mortgage rates will begin to engage buyers that have been hesitating.  This should bode well for smart home adoption with modest systems and services, therefore beginning the smart home upgrade journey as buyers mature, grow income and consider future home purchases.

Summary observation is that after a nearly 40-year tailwind of falling interest rates from approximately 14% in 1985; 9.5% in 1995; 7% in 2005; 5% in 2015; a rise to 7.5% in 2022-2023 and the current 2025 rate of 6.25%, the housing market stalled.

The trend for mortgages from 2022-2025 of approximately 3% to 7.5% began a brief resurgence followed by inflationary times and rising rates slowing demand. 

In other words, the party ended, and homebuyers and refinance customers retracted.  Now arriving at the end of 2025, the outlook for 2026 looks promising with rates close to 6% and the expectation of further rate decreases.

An interesting discussion point as noted by Burns was the “4-5-6 Rule for Demographic Predictions” in their book Big Shifts Ahead https://www.bigshiftsahead.com/the-456-rule

4 Big Influencers

·      Government Policies

·      Economic Conditions

·      Technological Advances

·      Societal Shifts

…During People’s 5 Main Life Stages

·      Childhood

·      Early Career

·      Family Formation

·      Late Career

·      Retirement

…Helps Answer The 6 Key Consumer Questions

·      How much money will consumers have?

·      What will they choose to purchase?

·      When will they make these purchases?

·      Where will they live and spend?

·      Who will they live with and spend on and share with?

·      Why will they buy certain products and not others? 

The “4-5-6 Rule” points includes some nugget for smart home professionals. Technological advances as an influencer is in our wheelhouse.  Family formation and Late Career life stages are likely key earning and at home wants needs years. What will they purchase, when and why is where our profession can gain the most value for long-term industry prosperity. 

I’ll close with two additionally impactful findings in the Burns 2026 Outlook:

·      The age of first-time home buyers has surged to 40 years.

·      This has been a recent and rapid rise from 33 years in 2021.

Net Population Change Demographic by Age Group

·      Big growth in 40–55-year-olds ( 6.9 million) and 70+ (14.9 million)

·      Little Growth in 25–39-year-olds (1.5 million)

·      Declines in 55-69 (3.7 million)

What does this mean?  My thought is that it means smart home professionals must tune in on the demographic range of 25 to 55 years. That’s where population is growing, entering family formation, income earning, needs and desires for their home lifestyle experience.  Resonating with a 25-year-old and a 55-year-old will require different approach but both are important for the growth of your business and the future of our profession.