The 2026 Housing Market Starts on an Optimistic Note

It's the start of the spring home buying season. Let's look at how 2026 is positioned compared to last year:

Inventory: 13% more than when we started 2025. Not increasing quickly, but enough homes on the market to keep prices from climbing.

Sales: Running 1-2% above last year's pace. Some areas like the New York tri-state area and Illinois are still supply-constrained so sales remain at or below 2025 levels.

Prices: Essentially flat. Depending on how you measure — up 1%, flat, or down 1%. Nothing in the data suggests big moves in either direction. Flat is the new up.

Price Reductions: Dipped lower over the holidays. Watching this data closely over the next few weeks to see if buyers are responding to better affordability. 

The big variable: Mortgage rates are 90 basis points lower than at the start of 2025. Your monthly payment is roughly 7% cheaper if you buy now versus last January. Some buyers are taking advantage. How many will determine how this spring plays out.

What to watch in the coming weeks:

New listings will start ticking up. Prices will begin their seasonal increase. In a normal pattern, inventory starts climbing reliably by the end of January.

But here's the key insight:

The supply-demand balance in January gives us early signal for the entire year. In hot markets like 2021, demand was so strong inventory kept falling into April. In weak markets, inventory builds early.

Momentum is slightly positive. Affordability has improved over last year. There's more selection for buyers. The question is whether enough buyers take advantage this spring.