We call this year’s report The Resilience of Luxury because the market has continued to hold its ground despite geopolitical, economic, and trade policy uncertainty.
The luxury real estate market has not mirrored the broader housing market, where affordability pressures and higher borrowing costs have kept activity constrained. For example, the National Association of REALTORS® (NAR)1 reported a modest 1.7% increase in existing-home sales for the entire real estate market as of October 2025. But when isolating the top 10% of the market, the Institute for Luxury Home Marketing (“the Institute”) found that luxury sales rose 2.9% year-over-year — nearly double.
While luxury home sales activity has slowed compared to the peaks of 2020-2022, the market appears to be settling into a more balanced state — returning to what we consider to be “normal.” Some may be tempted to call this a downcycle, but what makes this moment unique is that it does not resemble past downturns. We are seeing steady price appreciation, consistent sales velocity (especially for single-family homes), and a luxury buyer pool that remains both active and well-capitalized.
After analyzing this year’s trends and insights from the Institute, Altrata, McKinsey, and JamesEdition, one finding was clear: today’s affluent consumers are behaving fundamentally different from past cycles
WHAT’S DRIVING THE RESILIENCE FACTOR?
Many of the dynamics that kept the luxury market strong in 2025 now underpin the trends emerging for 2026.
Real Estate as a Wealth Cornerstone Economic uncertainty may form the backdrop of today’s world, but luxury real estate continues to show its strength as a mature asset class. The home now sits alongside private equity, art, and other longterm holdings within well-diversified portfolios. This institutional approach continues to lend stability to the sector.
A Capital-Driven Market
Affluent individuals, whose wealth portfolios tend to be more diversified and supported by ample capital, are often better insulated from economic ups and downs.
Luxury real estate remains largely capital-driven and far less dependent on financing conditions. In other words, liquidity continues to power the luxury housing market. Buyers Are Active, But More Discerning Than Ever In prior downturns, wealthy buyers might have paused their purchasing plans. Today, rather than stepping out of the market entirely, many are simply becoming more selective. Real estate decisions are increasingly rooted in long-term strategy, not the rapid-appreciation expectations that once fueled the market.
