The most telling story to come out of The Mid-Year Report 2026 is how the luxury real estate market is coloring outside the lines of the current doom-and-gloom economic headlines. The affluent are still buying homes—and in many cases, they’re buying more. Their refusal to be sidelined by market anxiety propelled the high-end segment to a 4.3% YOY increase in sales while the broader market flatlined at zero for the same period.
To find out why the affluent, and especially the ultra-affluent, aren’t rattled by these headlines, I turned to our expert contributors for this report: Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of REALTORS®, and Winston Chesterfield, founder of London-based Barton Consulting.
Here is what they had to say about what is driving this unprecedented market divergence.
Conventional wisdom says buyers pull back during times of uncertainty, which appears to be the case in the traditional housing market right now, as NAR data shows it stagnated from May 2025 to May 2026. But that's not what we're seeing in luxury. What's actually happening?
Jessica Lautz: Historically, in times of uncertainty, people tend to move their money from the stock market and into real estate because they view it as a safer financial investment. That is a traditional pattern.
Winston Chesterfield: Real estate becomes a haven when people are concerned about growth. The affluent are moving their money into real estate because they feel certain areas of the stock market are over-inflated. They feel real estate swings underneath the stock market. And they’re much more pessimistic about the global economy at the moment. Real estate is still highly valued as a wealth asset.
We’re seeing a real divergence in how ultra-high-net-worth buyers and high-net-worth buyers are responding to current conditions. What's driving that gap?
Winston Chesterfield: Ultra-high-net-worth individuals are basically recession-proof. They are the most resilient group. They are not rate-sensitive.They simply have far more liquid capital at their disposal. There’s an enormous gap between someone with a net worth of $30 million versus someone with a net worth of $3 millllion, which is a lot closer to the mass affluent profile. So it’s easy to understand why they’re being a little more cautious right now.
Jessica Lautz: We saw a K-shaped recovery in the economy during the COVID-19 pandemic, where some segments of society and industry rebounded quickly while others lagged. Today, we are seeing that same K-shaped dynamic divide the affluent housing market. On the upward arm of the K, ultra-high-net-worth buyers are leading the market, buying homes as they always have. They are building wealth and moving quickly because they don't need to worry about financing. Meanwhile, on the downward arm, some high-net-worth buyers are feeling the squeeze. But this is all on a spectrum, because high-net-worth buyers are still more resilient to economic uncertainty and affordaibility issues than, say, first-time buyers trying to get into the market. Even still, we know that current homeowners are the clear winners in this housing market. Wealth is continuing to be built, as home prices are expected to go up.
The Luxury Property Specialists we surveyed for the Mid-Year Report 2026 reported a significant uptick in cash transactions at the high end. What does that tell us about how affluent buyers are thinking about real estate right now?
Winston Chesterfield: It’s a reflection of the fact that these buyers have an incredible amount of options. They have made a significant amount of money out of the certainty in the market, and they have access to highly sophisticated investments. Why would they borrow money when it is so much more expensive to do so right now? I’ve seen recent figures showing cash purchases lifting to 50% or 60% of luxury real estate transactions today. Rate insulation is certainly a factor for this. I expect to see established cash reserves being used more and more as a primary tool to secure real estate.
Jessica Lautz: I’ll speak a little more broadly to the real estate market. More than a quarter of the market has been paying cash for several years now. This is a post-COVID trend that appears to be sticky. Before COVID, it was about 15% for cash purchases. This is for primary repeat buyers. About 1 in 10 first-time buyers are now paying cash—an all time high in the last two years. We think one reason for the uptick in cash transactions has to do with baby boomers, who are choosing not to downsize. Many of them are using the freedom of their accumulated housing equity to buy their next homes outright with cash. About 26% of first-time buyers are also using financial assets—that’s the highest we’ve ever seen and it’s quite unusual. It shows that a wealthier, higher income first-time buyer has entered the market.
Looking at the rest of 2026 and beyond, what's your read on where this market goes? What should luxury clients be paying attention to?
Jessica Lautz: First, don't expect dramatic shocks to the system. Prices are expected to gradually improve. Inventory will continue to climb as the lock-in effect eases, as many homeowners above 6% are now approaching those holding 3% rates. With lots of home equity, buyers are continuing to push into the luxury sector, and with the stock market still doing well, many buyers are relying on liquidity to enter the market. It speaks to the overall stability of the high-end sector.
Winston Chesterfield: I would tell them to watch the ongoing generational wealth transfer, which is going to continue to heavily influence the market through more cash purchases and multi-generational buying. The whole notion of Millennials not wanting real estate has largely proved to be a myth; it turns out they were just late bloomers. We can expect the aspirational market to return to normal in about 12 to 16 months. Meanwhile, ultra-high-net-worth buyers remain completely immune to these pressures, actively expanding their real estate portfolios whenever they spot good value. Real estate could represent 10 to 16% more of their portfolios.
It’s clear that the affluent view luxury real estate as a long-term cornerstone of wealth, regardless of the current news cycle. Jessica, Winston—thank you both for sharing your insights. Our full Mid-Year Report digs into all of this, and several other key trends, in much more depth.
Brandon Newman is the Vice President of Marketing at Coldwell Banker Real Estate, where he drives brand modernization, luxury positioning, and lifestyle-driven marketing strategies to propel the brand’s continued growth and industry leadership.
