Will US existing home sales exceed 4.0M SAAR for 3+ consecutive months by end of 2026?

Existing home sales have been below 4.0M SAAR for an extended period, sustained by the mortgage lock-in effect. With mortgage rates still elevated above 6%, homeowners with 3% mortgages have powerful disincentive to sell. The committee noted housing recovery has been 'coming' for 3+ years. For 3 consecutive months above 4.0M SAAR by December 2026, rates would need to decline significantly (likely below 5.5%) and consumer confidence would need to improve substantially. Neither appears likely in the near term given current Fed policy trajectory.

The 4.0M SAAR threshold is significant — it represents a meaningful break from the 3.5-3.9M range that has persisted. The requirement for 3 consecutive months eliminates seasonal spikes. The mortgage lock-in effect is the primary constraint and it's structural: ~60% of outstanding mortgages are below 4%, creating massive disincentive to sell. Even management (who would benefit from talking up housing) does not include housing recovery in their base case. The committee classified this as 'not a 2026 base case but a plausible upside scenario.'

There are scenarios where this could happen: significant mortgage rate decline (Fed cuts aggressively), pent-up demand release (life events force moves regardless of rates), new construction filling some gap. The February 2026 existing home sales showed some improvement, and spring typically sees seasonal uptick. But the 3-consecutive-month requirement at 4.0M+ is a high bar. Even in an improving environment, the trajectory from current levels to sustained 4.0M+ would likely take longer than the remaining months in 2026.

This is a macro question where the analysis committee's findings strongly suggest NO. Existing home sales at 30-year lows, mortgage lock-in effect structural, management doesn't factor recovery into guidance. The requirement for 3 consecutive months above 4.0M SAAR is demanding. Current trajectory suggests this is a 2027-2028 event at earliest, contingent on meaningful rate declines. Low probability.

Strongly lean NO. The mortgage lock-in effect is one of the most powerful structural forces in the current economy. Existing home sales have been stuck below 4.0M for 3+ years despite repeated calls for recovery. The requirement for 3 consecutive months eliminates lucky-month spikes. No credible macroeconomic scenario makes this likely by year-end 2026 — even 100bps of Fed cuts wouldn't reduce mortgage rates enough to unlock significant turnover.

While the structural constraints are real, there is non-trivial probability of a housing market inflection. Pent-up demand from delayed life events (divorces, job relocations, upsizing) accumulates over time and creates eventual release regardless of rates. New construction additions increase total supply. If mortgage rates decline to 5.5% or below, the lock-in calculus changes for some homeowners. But 3 consecutive months above 4.0M by December 2026 remains a stretch — more likely to see intermittent months at or near 4.0M.

Existing home sales at 30-year lows with structural mortgage lock-in. Committee classified housing recovery as upside scenario, not base case. 3 consecutive months above 4.0M is a high bar. Low probability.

The macro environment does not support sustained above-4.0M existing home sales by year-end 2026. Mortgage rates above 6%, consumer sentiment weak, 3-year pattern of failed recovery. Some spring seasonal lift possible but not sustained above 4.0M for 3 months.

Low probability event. The structural constraints (mortgage lock-in, rate levels, consumer sentiment) all argue against sustained above-4.0M SAAR by year-end 2026. The committee's analysis is clear: this is a plausible upside scenario, not a base case. Assigning ~20% probability to account for tail scenarios (aggressive Fed cuts, sudden pent-up demand release).