Homebuyers in the Lehigh Valley can anticipate a more stable housing market in 2026, according to the latest annual report from the Greater Lehigh Valley Realtors (GLVR). After experiencing rising prices and dwindling inventory in recent years, the market is projected to improve, offering some relief to consumers.
Forecasts indicate that mortgage rates, which fell in the latter half of 2025, will remain around the 6% mark throughout the upcoming year. This trend is expected to bolster affordability for homebuyers. On January 4, 2026, the benchmark 30-year fixed mortgage rate was recorded at 6.11%, a slight increase from 6.1% the previous week, but significantly lower than the 6.89% average one year prior, according to mortgage buyer Freddie Mac.
Market Trends and Predictions
The GLVR anticipates a rise in market activity as inventory levels improve. The report suggests that while home prices will see modest increases, they will not reach the rapid appreciation levels observed in prior years. “As inventory builds, sales volume is projected to increase,” the report stated.
In 2025, the number of homes available for sale in the Lehigh Valley decreased by 9.3% compared to 2024, culminating in 605 active listings at year-end. New listings experienced a slight uptick of 0.8%, finishing the year at 7,848. The overall median sales price for homes in the Valley rose by 3.7%, reaching $350,000. Prices for single-family homes increased by 5%, while townhouse and condominium prices climbed by 5.4%.
Nationally, the National Association of Realtors (NAR) predicts a 14% increase in existing home sales for 2026. Chief economist Lawrence Yun noted that the anticipated rebound is driven by declining mortgage rates, ongoing job growth, and an overall stabilization of the market following several challenging years. Home prices nationwide are forecast to rise by 4%, supported by steady demand amid persistent supply shortages.
Challenges and Opportunities Ahead
Despite the positive outlook, challenges remain. The GLVR highlighted that affordability constraints and the repercussions of a decade-long supply shortfall will continue to influence the market landscape. “Taken together, these trends suggest 2026 will be a year of stabilization and recovery, rather than dramatic change,” the GLVR indicated.
In terms of specific statistics, pending sales in the Lehigh Valley rose by 2.1%, concluding 2025 with 6,577 transactions. Closed sales saw a modest gain of 1.2%, ending the year at 6,525. On average, sellers received 100.8% of their list price, while year-over-year list prices decreased slightly by 0.3%. Notably, the percentage of closed sales categorized as either foreclosure or short sale was only 0.8%, down from 1% in 2024.
The report also identified the Northwestern Lehigh school district as the most expensive area for homebuyers, with a median property price of $511,050, reflecting a significant increase of 20.7% from 2024. The Southern Lehigh district followed, with a median price of $450,000, which saw a decrease of 9%.
As the Lehigh Valley housing market moves into 2026, it appears set to offer a more balanced environment for buyers, with improving conditions reflecting a shift from the previous years’ volatility.
