If you’ve been waiting for a clear signal on the El Dorado Hills real estate market — from someone who actually has the big picture data — this is it. NAR Chief Economist Lawrence Yun presented his 2026 economic and housing forecast this week to our PLACE real estate teams across the country, and the picture for our local buyers and sellers is more compelling than most people might think.

The Big Picture: We're in Recovery, Not a Crisis

Let’s start with the headline question: are we headed for a recession? Yun’s answer is nuanced —no, but the emotional climate is complex. GDP grew 2% in 2025, a respectable but modest number. The latest quarter came in around 1.4%, inching toward recessionary territory by that measure.

Here’s the the thing that matters most for real estate: consumer sentiment has dropped to levels not seen since 2009 — the height of the foreclosure crisis. But unlike 2009, we are not losing jobs at that scale. We are not in a foreclosure crisis. And real estate values are at record highs.

The anxiety driving people to the sidelines is understandable. But it’s being driven by scary headlines, not by the underlying housing data. In El Dorado Hills and the broader Sacramento Foothills market, the trajectory is toward recovery — not away from it. When I looked at pending home sales, February-to-date, on the day of Yun's presentation, El Dorado Hills was tracking 16.7% ahead of January and 20.7% ahead of last February.

The Forecast: A 14% Increase in Home Sales

This isn’t a boom forecast. It’s a recovery. And that distinction matters. We’re not calling a peak — we’re describing momentum off a very low floor. The 2025 market saw approximately 4.1 million total home sales nationally. That’s roughly 25% below where we were before COVID disrupted everything.

For El Dorado Hills, which has consistently attracted buyers from the Bay Area, Sacramento, and beyond — driven by schools, lifestyle, and value — a rising national tide translates directly to local demand. When more buyers are in the market nationally, our market feels it first and most. The numbers I shared above support that.

Mortgage Rates: The Part Nobody Explains Correctly

This is where Yun said something that every buyer in El Dorado Hills should understand before making any decisions, and maybe you do, but it bears repeating.

The Fed cut rates three times in 2025 and is expected to cut again in 2026 under incoming Fed Chair Kevin Walsh. But mortgage rates are influenced by a much broader set of factors: national debt levels, Treasury yields, inflation, and global capital flows. On the day of Yun’s presentation, the Supreme Court’s ruling overturning tariffs actually nudged the 10-year Treasury yield upward — which puts modest pressure on mortgage rates.

Yun’s 2026 forecast is for rates to settle near 6%. At that level, significantly more buyers qualify than they did at 7% — mortgage applications have been rising since spring 2025, showing that buyer interest and intent is already building.

Sellers: It's Likely Your Equity Has Never Been Higher

What makes spring 2026 particularly interesting is that two conditions are aligning at the same time: inventory is rising (giving you options on the buy side) and buyer demand is increasing (supporting your sale price). It's unusual to see those two things don’t move in the same direction.

If you’re thinking about upsizing, downsizing, or making a lifestyle move within El Dorado Hills — the data suggests this window is worth a serious conversation. You can potentially maximize what you net on the sale while still having negotiating leverage on your next purchase. That’s rare.

The Inventory Story: More Choices Are Coming

One of the most important shifts in 2026 is inventory. In EDH, there are 34% more homes for sale this month than last and 4% more than a year ago. After two years of historically tight supply, this trend is expected throughout this year. For buyers, this means less competition, more choices, and more room to negotiate. For sellers, it means the market will reward preparation — homes that are priced and presented well will still move quickly, but the days of any listing selling in 48 hours regardless of condition are less certain.

Yun also flagged a policy wildcard that has the potential to significantly boost inventory: NAR is among those actively lobbying to raise the capital gains tax exclusion on home sales. The current thresholds ($250K for individuals, $500K for couples) haven’t been updated since the early 1990's. In a market like El Dorado Hills — where long-term appreciation has been meaningful — many homeowners have been reluctant to sell because the tax exposure can offset their equity. A legislative change here could unlock a meaningful wave of new listings.

What AI Means for Your Real Estate Decision

Yun addressed artificial intelligence and the future economy in a way that’s directly relevant to El Dorado Hills buyers. His prediction: within 10 years, AI will reduce average work weeks from 40 to 30 hours (yay!) — with equal or higher incomes (more yay!). More flexibility. More remote capability. More ability to choose where you live based on lifestyle, not commute distance.

For a community like El Dorado Hills — already a top destination for those seeking quality of life within reach of Sacramento, Tahoe, and the Bay Area — this trend is a long-term demand driver. The buyers choosing El Dorado Hills aren’t just buying a home. They’re choosing a way of life that brought many of us here in the first place! 

The Bottom Line for El Dorado Hills

Lawrence Yun’s 2026 forecast is grounded in data, not optimism for its own sake. A 14% projected increase in home sales is a recovery, not a record. But for buyers and sellers in El Dorado Hills, the opportunity is real, the window is open, and the spring market, which is starting now, will tell the story.

Whether you’re a first-time buyer finally ready to build equity instead of paying rent, a move-up buyer eyeing more space or a better zip code, or a long-term homeowner wondering if this is your moment — the data is giving you more signal than noise right now.

Let’s get together and decipher what that means for your specific situation.

Ready to talk about your move?

Whether you’re buying, selling, or just want to know what your El Dorado Hills home is worth right now — let’s have a real conversation based on real data.

© 2026 Shannon Yoffie · Yoffie Real Estate Group · yoffierealestategroup.com · (916) 941-6566

Source: Lawrence Yun, NAR Chief Economist, February 2026 presentation via PLACE platform. Information is believed accurate but not guaranteed. Not intended as financial advice.