Where Millennials Are Leading the Housing Rebound in NAR’s Top 10 Markets for 2026

Disclaimer: Some content in this article includes direct quotes and references from publicly available sources. Full credit is given to the original author and publisher. This blog post is for informational purposes only and does not claim ownership of any third-party content.

After three years of stagnant home sales, the real estate market is poised for a significant turnaround. The National Association of Realtors has released its highly anticipated forecast for 2026, predicting a 14 percent increase in existing home sales and identifying ten metropolitan areas positioned to outperform the national market. What makes this forecast particularly noteworthy is the common thread running through nearly all of these hot spot markets: a strong presence of millennial homebuyers ready to enter the market.

A Double-Digit Rebound on the Horizon

The optimism surrounding 2026 is grounded in concrete economic indicators. NAR's chief economist Lawrence Yun projects that higher inventory levels, modest improvements in affordability, and more accommodating monetary policy from the Federal Reserve will create conditions that help more Americans buy their next home. This represents a dramatic shift from the challenging environment that has characterized recent years.

The anticipated drop in mortgage rates to an average of 6 percent throughout 2026 could be transformative. This decline from the roughly 7 percent rates we've seen would expand the pool of qualified homebuyers by approximately 5.5 million households nationwide, including 1.6 million renter households. That's a massive influx of potential buyers returning to the market.

The Ten Markets Leading the Way

NAR's analysis identified ten metropolitan areas that stand out for their combination of strong demand potential, projected improvements in affordability, and housing inventory that aligns with buyers' budgets. Listed alphabetically, these housing hot spots are Charleston, Charlotte, Columbus, Indianapolis, Jacksonville, Minneapolis-St. Paul, Raleigh, Richmond, Salt Lake City, and Spokane.

Each of these markets earned its spot by outperforming the national average on at least five of ten critical indicators while maintaining populations above 250,000. The selection criteria included millennial household concentration, household income growth, job growth, sensitivity to lower mortgage rates, domestic migration patterns, price reduction trends, listings-to-income alignment, mortgage-payment-to-rent ratio, growth in single-family building permits, and mortgage origination growth.

The Millennial Factor: Why It Matters

One of the most striking patterns across these markets is their strong millennial presence. These younger households, many now in their prime homebuying years, represent built-in demand that will activate as rates fall and affordability improves. The millennial concentration in these markets ranges from approximately 34 percent to nearly 38 percent of all households—significantly higher than many other metropolitan areas.

Minneapolis-St. Paul exemplifies the millennial-driven opportunity. More than 81,000 newly qualified households would enter the market with rates at 6 percent. The area is seeing more homes in the accessible price range return to the market, combined with strong job growth and a high concentration of millennial households.

Charlotte's appeal is similarly straightforward—young buyers, strong jobs, and more listings where people need them. Over 52,000 additional households would qualify for a median-priced home at a 6 percent mortgage rate. The metro benefits from strong migration inflow, income gains, robust job growth, and high millennial concentration, with millennials representing 36.6 percent of local households.

Regional Diversity Creates Multiple Opportunities

What's particularly interesting about this year's hot spot list is its geographic diversity. Rather than clustering in a single region, these markets span the country from the Southeast to the Pacific Northwest, from the Upper Midwest to the Mountain West.

Raleigh stands out for its combination of fast-growing incomes and better-aligned inventory. Nearly 27,000 additional households would qualify for a median-priced home with rates easing to 6 percent. The area's millennial households represent 37.7 percent of all households, and income growth has been substantial.

Salt Lake City brings youth and rapid growth to the equation. About 25,000 additional households could afford a median-priced home at 6 percent rates. The youthful demographics and improving inventory position Salt Lake City as one of the biggest beneficiaries of lower rates. Notably, listings aligned with local incomes have surged 20.7 percent year over year, marking it as one of the strongest affordability rebound markets.

The Affordability-Inventory Connection

A critical insight from the NAR analysis is that rate reductions alone don't guarantee market success. Homebuying benefits most when affordability is matched with attainability—meaning a for-sale inventory that aligns with buyers' incomes. This is where the top ten markets distinguish themselves from others.

Indianapolis offers one of the clearest affordability paths for 2026 buyers. More than 42,700 additional households would qualify at a 6 percent rate, and the area demonstrates a strong match between home prices and local incomes. The balance and steadiness of the Indianapolis market make it one of the most opportunity-rich heading into the new year.

Jacksonville represents a Florida market where both affordability and inventory are improving simultaneously. More than 39,700 additional households qualify for a median-priced home at a 6 percent rate. The area also benefits from strong income growth and rising migration, with income growth reaching 6.5 percent higher than the previous year.

The Midwest and South Lead the Charge

Several Midwestern and Southern markets feature prominently on the hot spot list, reflecting their combination of affordability, job growth, and quality of life. Columbus continues to outperform expectations as one of the Midwest's most resilient and stable housing markets. More than 41,000 additional households would qualify at a 6 percent mortgage rate, with millennials making up 37.5 percent of the area.

Richmond offers stability that becomes opportunity in 2026. More than 25,500 additional households qualify for a median-priced home with mortgage rates at 6 percent. The market demonstrates strong job gains, fewer price cuts than the national average, a stronger match between home prices and incomes, and a solid millennial presence at 34.5 percent of households.

Charleston represents a fast-growing market where inventory is expanding at the right price points. More than 20,000 additional households would qualify for a median-priced home with mortgage rates easing to 6 percent. The area has a large pool of renters positioned right at the edge of affordability, where even a modest rate reduction significantly expands the number of local households who qualify for the median home.

Western Markets Offer Unique Value

While the West Coast has faced affordability challenges in recent years, Spokane stands out as one of the few Western metros where both affordability and inventory are trending in the right direction. Over 9,500 additional households qualify for a median-priced home with mortgage rates at 6 percent. The market shows strong income growth, high millennial concentration, and fewer price cuts than the national average.

What Orange County Buyers and Sellers Should Know

While Orange County doesn't appear on this year's hot spot list, understanding these national trends provides valuable context for our local market. The factors driving success in these ten markets—millennial demand, income growth, inventory aligned with buyer budgets, and rate sensitivity—are universal forces affecting real estate nationwide.

Orange County continues to offer advantages that transcend any single year's market conditions. Our location, lifestyle, economic diversity, and long-term value proposition remain compelling. However, the success of these emerging markets demonstrates that today's buyers are increasingly sophisticated, weighing affordability, career opportunities, and quality of life in their decisions.

For Orange County sellers, the lesson is clear: pricing must reflect current market realities. Properties that offer genuine value relative to local incomes will continue to attract serious buyers. For buyers, particularly millennials who have been priced out in recent years, the improving rate environment and growing inventory create opportunities that haven't existed since before the pandemic.

Strategic Positioning for 2026

The NAR forecast suggests that 2026 will be a year of renewed activity and opportunity. Markets that have aligned their inventory with what buyers can actually afford, combined with strong employment prospects and demographic demand, are positioned to thrive. The anticipated rate improvements will unlock millions of potential buyers nationwide, creating momentum that extends beyond just the hot spot markets.

Understanding where the market is headed nationally helps inform local strategy. Whether you're a first-time buyer watching rates carefully, a move-up buyer waiting for the right opportunity, or a seller trying to time the market effectively, the trends identified in the NAR report provide important signals about the year ahead.

Bottomline

The housing market's anticipated rebound in 2026 reflects improving fundamentals that will create opportunities for both buyers and sellers. While other markets may see explosive growth, Orange County's enduring appeal ensures continued strength in our local real estate landscape. The key to success in any market environment is working with someone who understands both the broader trends and the specific dynamics that will impact your real estate goals.

At Whitestone Real Estate, I'm dedicated to helping you navigate Orange County's unique market with insight, expertise, and personalized service. Whether you're considering a move to capitalize on improving conditions, exploring your options as a first-time buyer, or positioning a property for sale in the new year, now is the time to start planning your strategy. The markets may vary across the country, but the fundamentals of successful real estate remain constant—preparation, knowledge, and the right partner to guide you through the process. Let's connect and explore how the opportunities of 2026 can work for your specific situation.

Reference: Prenon, M. (2025, December 18). NAR predicts top 10 housing hot spots for 2026—most have strong millennial presence. The Epoch Times.