Here’s What the Luxury Housing Market Looks Like Heading Into 2026

The luxury housing market is heading into 2026 with a high level of confidence most other sectors can’t claim—that’s the clear takeaway from Sotheby’s latest outlook report, which draws on global sales data, agent surveys, and buyer behavior at the top end of the market. After outperforming traditional real estate in both sales and value last year, luxury home sales are expected to keep their edge, fueled by wealth creation, international demand, and deep-pocketed buyers who are far less rattled by interest rates than the average homeowner.

Two of the biggest reasons for the optimism are who’s buying high-end homes and why. According to the report, many luxury buyers aren’t shopping for their first home; they’re adding to a portfolio. Globally, just over half of luxury purchases in 2025 were primary residences, while second homes made up a significant share. In Florida, that figure climbed even higher, with more than half of luxury transactions tied to second-home purchases. As Philip A. White Jr., president and CEO of Sotheby’s International Realty, puts it, many clients are on their second, third, or even fourth property, splitting time across multiple locations rather than committing to a single address.

Another major force shaping the market is money—specifically, inherited money. The report highlights that roughly $6 trillion was passed down globally in 2025 alone, creating a new wave of well-capitalized buyers who are moving quickly and often paying cash. That transfer is skewing luxury buyers younger and reinforcing real estate’s role as a long-term, tangible place to park wealth. Rather than waiting on perfect market conditions, many are buying with an eye toward stability, lifestyle, and holding power.

At the same time, the definition of what constitutes a luxury home keeps getting more expensive. Nationally, the entry point now starts around $1.3 million, with prices climbing much higher in global hubs like Los Angeles and New York. Inventory at the upper end of the U.S. market has begun to loosen slightly, with the supply of $1 million-plus homes at its highest level since 2020. That’s giving buyers more choice but without softening prices in the most desirable, supply-constrained neighborhoods.

International buyers are also back in a big way. Foreign buyer activity in the U.S. jumped 44 percent year over year, according to the report, with Florida, California, Texas, and New York continuing to draw global capital. Beyond traditional gateway cities, Sotheby’s agents are seeing growing interest in lifestyle-driven markets that combine security, stability, and quality of life. Not surprisingly, privacy and security now rank as top concerns for luxury buyers worldwide, even as crime declines in many regions.

Perhaps the most human—rather than lifestyle or financial—shift the report identifies is the rise of multigenerational living at the high end of the market. Nearly one in five luxury purchases in the U.S. now involves buyers planning to live with relatives beyond their immediate family. Millennials and Gen Xers are driving the trend, searching for homes that work for young children and aging parents alike. That demand is reshaping design itself, with buyers building compoundsand acquiring contiguous homes in addition to prioritizing guesthouses, self-contained apartments, and multiple primary bedroom suites, the latter often with private sitting rooms or office space to create a sense of balance and independence across generations.

The picture that emerges for the coming year is of a luxury market driven as much by lifestyle and legacy as by economics. As buyers rethink how—and with whom—they want to live, high-end real estate remains a preferred place to invest not just capital but also time, family, and long-term value.