January 2026 Real Estate Market Update: What’s Happening Right Now
The housing market is showing signs of stabilization early in 2026, and this week’s data highlights key trends worth watching for both buyers and sellers.
Mortgage Rates Remain a Key Driver
Mortgage rates have dipped to their lowest levels in over three years, with the average 30-year fixed mortgage around ~6.06% — down roughly a full percentage point from last year’s peak and improving overall affordability for many buyers.
This decline in borrowing costs is sparking renewed buyer interest, as lower rates expand purchasing power without dramatically increasing monthly payments.
Home Prices: Growth Is Slowing
According to the latest Redfin Home Price Index:
Home prices rose 0.1% in December 2025 (seasonally adjusted) compared with November.
Year-over-year price growth is ~2.2%, the slowest pace in over a decade.
This measured growth suggests the market is easing away from the rapid price acceleration seen in previous years, giving buyers slightly more breathing room.
Sales and Inventory Trends
Recent data from the National Association of REALTORS® shows:
Existing home sales increased by 5.1% month-over-month in December 2025, the strongest pace in nearly three years.
Inventory growth has continued — weekly housing inventory rose about 10.5% year-over-year for the week ending Jan. 17, 2026.
Growing inventory — even if still below balanced levels — means buyers have more choices than in prior tight-supply conditions. For sellers, this also means pricing and staging are more important than ever to stand out.
What This Means for You This Week
For Buyers
✔ Lower mortgage rates make financing more attractive
✔ More inventory means choice in desirable areas
✔ Slower price growth reduces pressure to rush
Tip: Use this window to get pre-approved, compare lenders, and be ready for competitive offers — but don’t overpay due to fear of missing out.
For Sellers
✔ Demand is steady, not booming
✔ Buyers are more rate-sensitive and price-aware
✔ Accurate pricing leads to faster sales
Tip: With more inventory returning, strategic pricing, great photos, and targeted marketing will set your listing apart.
Looking Ahead
Experts expect 2026 to be a more balanced market:
Realtor.com forecasts modest home price growth (~2.2%) and continued inventory gains, with national housing supply moving closer to healthier levels.
Mortgage rates are expected to hold in the 6.0–6.3% range, offering stability for planning.
This balance could make 2026 a breakthrough year for those previously priced out or waiting on the sidelines.
Final Thought
This week’s market has shifted from frenetic to functional. Buyers are gaining leverage, pricing pressure on sellers is easing, and mortgage rates — while higher than historical averages — are more favorable than they’ve been in years. Whether you’re looking to buy, sell, or invest, understanding these moving pieces will help you make smarter real estate decisions.