The Housing Market Is Turning a Corner Going into 2026
After a stretch of high mortgage rates and slower buyer activity, the housing market is starting to show signs of real movement again. Sellers who stayed on the sidelines are beginning to list. Buyers who paused their plans are taking another look. It is not a sudden jump, but it is a meaningful change that points toward a steadier year ahead.
As 2026 approaches, three major shifts are helping bring new life into the market.
1. Mortgage Rates Have Been Coming Down
Mortgage rates naturally move up and down, especially when the broader economy is uncertain. While short term fluctuations are normal, the overall trend this year is what truly stands out.
Rates have been easing for much of the year and the past few months have delivered some of the lowest levels seen in 2025. (see graph below):
According to Sam Khater, Chief Economist at Freddie Mac:
“On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving.”
That shift directly impacts buying power. Lower rates mean lower monthly payments and more room in the budget. According to data from Redfin, a buyer working with a $3,000 monthly budget can now afford about $25,000 more than they could one year ago. Improvements like this are encouraging more buyers to move forward.
2. More Homeowners Are Finally Ready to Sell
Over the past few years, many homeowners chose to stay put because they did not want to trade their low mortgage rate for a higher one. This created a shortage of homes for sale. As rates soften, that lock in effect is easing and life changes are becoming stronger motivators for moving.
Data from Realtor.com shows the number of homes for sale has grown noticeably, and inventory is approaching levels the market has not seen in nearly six years (see the blue on the graph below):
A return to more typical inventory levels gives buyers more options and helps the market find better balance.
3. Buyers Are Stepping Back Into the Market
With additional choices and slightly improved affordability, buyers are re engaging. The Mortgage Bankers Association (MBA) reports that purchase applications are higher than they were last year, which signals strengthening demand (see graph below):
Industry experts, including economists from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) expect this upward trend to continue into 2026, supporting a gradual rise in home sales.
This is not an overnight rebound, but it is a meaningful step toward a healthier and more active market.
Bottom Line
After several slower years, the housing market is finally building momentum again. Softer mortgage rates, more homes for sale, and increasing buyer activity are all pointing toward a market that is turning the page and gaining stability.
If you are planning to buy or sell in 2026, let’s connect and talk about what this shift means for your next move.
Vesta Schneider
Realtor®
Luxury Homes | Relocation | Investments
Keller Williams Realty McKinney
📞 302-530-7314
📧 vestaschneider@yahoo.com
