After facing rising prices and falling inventory last year, will Lehigh Valley homebuyers find some relief in 2026?
The Greater Lehigh Valley Realtors expects some solace for consumers in the new year, it said in its annual report, which was released last week.
The GLVR said experts are forecasting an improvement in market activity. That’s because mortgage rates declined through the second half of 2025 and are expected to stay in the 6% range in the year ahead, which should support incremental gains in affordability.
On Thursday, the benchmark 30-year fixed rate mortgage rate edged up to 6.11%, compared to the prior week when it was 6.1%, mortgage buyer Freddie Mac said. One year ago, the rate averaged 6.89%.
“As inventory builds, sales volume is projected to increase,” the GLVR said. “Economists anticipate modest increases in home prices, well below the rapid appreciation of recent years.”
The report said conditions should become somewhat more favorable for buyers, but affordability constraints and the effects of a decade-long supply shortfall will continue to shape the market.
“Taken together, these trends suggest 2026 will be a year of stabilization and recovery, rather than dramatic change,” the GLVR said.
In 2025, the number of homes available for sale in the Lehigh Valley was down 9.3% when compared with 2024. There were 605 active listings at the end of 2025. New listings increased by 0.8% to finish the year at 7,848.
Home prices in the Valley were up compared with the previous year. The overall median sales price increased 3.7% to $350,000 for the year. Single family home prices were up 5% compared with the previous year, and townhouse-condo home prices were up 5.4%.
Nationally, the National Association of Realtors predict that existing home sales will rise 14% in 2026.
NAR chief economist Lawrence Yun said the expected rebound reflects easing mortgage rates, continued job gains and improving market stability after several challenging years. Home prices are forecast to increase by 4% next year, supported by steady demand and persistent supply shortages.
“Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.”
Mortgage rates are projected to decline modestly, averaging around 6% in 2026.
Yun emphasized that while rates are influenced by more than Federal Reserve decisions alone, broader economic factors are contributing to gradually lower borrowing costs.
“As we go into next year, the mortgage rate will be a little bit better,” Yun said. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”
Other Lehigh Valley statistics from the GLVR included:
Pending sales increased 2.1%, finishing 2025 at 6,577. Closed sales were up 1.2% to end the year at 6,525.
Sellers received, on average, 100.8% of their list price at sale. Year-over-year list price decreased 0.3%.
Despite concerns over affordability, strong gains in equity seen by most homeowners in the last few years has limited the number of distressed sales. In 2025, the percentage of closed sales that were either foreclosure or short sale finished the year at 0.8% of the market. This is a decrease of properties over 2024, which saw 1% of sales as distressed.
The most expensive school district to find a house? Northwestern Lehigh properties had a median price of $511,050, up 20.7% from 2024. In second was Southern Lehigh at $450,000, which was down 9%.