Lenders are optimistic about manufacturing growth by 2026
“We are entering a shift,” said Shannon Herrmann, a Montana-based LO. “We have reached the bottom of the housing stagnation and will see a steady increase in home sales and a decline in mortgage rates by the third quarter of 2026.”
It is expected that buyers who choose a higher rate will benefit the most; 39% of lenders surveyed predict that this group will have the strongest results in the coming year. First-time buyers are expected to remain on the sidelines of the market, especially as high prices and difficulty saving for down payments remain obstacles.
Rising personal debt is prompting some potential buyers to try co-purchasing or non-traditional arrangements. “Friends, family members or investors team up to buy a house together,” Herrmann said.
Non-resident co-borrowers and donations from family members are also becoming increasingly common. But as homeownership becomes increasingly out of reach, HomeLight’s research shows that some buyers are turning to unlicensed online lenders or sales agents, often resulting in poor financial decisions.
Despite these challenges, reduced rates can entice hesitant buyers. “Lower rates [will] motivating buyers who were about to purchase their first home,” said Dennis Bergstrom, a loan officer with more than 20 years of experience.
Home equity will continue to be used for debt consolidation, while AI tools are expected to streamline the mortgage application process. Half of lenders surveyed believe AI will improve efficiency for both borrowers and lenders.
Buy-before-you-sell schemes are also expected to rise in popularity, with 41% of LOs predicting they will be the most popular form of alternative financing next year.
“At the end of the day, it’s all about timing,” says Richie Helali, HomeLight’s Enterprise Sales Manager. “If the average homeowner today is looking to purchase another property, using a buy-before-you-sell program gives them the opportunity to make a stronger offer on their current home, without the stress of wondering when they will get to their next home.”
Industry experts are urging potential buyers to act sooner rather than later.
“Homebuyers who could have bought a house in 2025 and waited will regret not doing so before mid-2026,” said Steve Farrington, an Arizona-based loan officer. For younger buyers, lenders recommend flexibility by starting small and consulting professionals to make long-term plans.
