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Early 2026 is bringing encouraging news for future homebuyers. Mortgage rates are trending lower, inventory is improving, and affordability is slowly stabilizing in many areas. These shifts are creating more opportunity and leverage for buyers who are preparing to enter the market. Here are the questions we are hearing most often and what they mean for you.
Are Rates Lowering?
Yes, mortgage rates have recently dipped below 6%, a meaningful shift from the higher levels we saw over the past two years. Rates have been one of the primary reasons many homeowners chose to stay put, especially those who secured historically low financing during the pandemic. While mortgage rates dominate headlines, real-life milestones often drive homebuying decisions instead. However, there is still a group of buyers who have been patiently waiting for improved affordability. As rates move back into the 5% range, we expect renewed activity from those who paused their plans. Even slight changes in rates can significantly impact monthly payments and purchasing power.
What is Happening with Housing Market Inventory?
Homes are staying on the market longer. Part of this is likely due to 2025 being marked as one of the slowest homebuying years in the past 30 years, with approximately 4.06 million existing home sales. For comparison, a more balanced and healthy housing market typically sees closer to 5.2 million annual sales, according to HousingWire. Lower overall sales volume means homes are not selling as quickly as they did during the peak seller-driven years, which can create meaningful advantages for buyers.
What Does a Buyer’s Market Bring?
When the market tilts toward buyers, opportunities begin to open up:
- Expanded inventory: A greater selection of homes allows buyers to compare features, neighborhoods, and pricing more thoughtfully.
- Reduced urgency: Homes staying on the market longer can mean fewer bidding wars and less pressure to rush decisions.
- Improved negotiations: Buyers may have more room to discuss pricing, request seller credits, or negotiate repairs.
- Stabilizing affordability: Moderating price growth for homes combined with steadier rates can positively impact overall purchasing power.
How Did the Market Do at the Beginning of 2026?
Although the year started with a slowdown in January, this does not necessarily reflect where the market is headed. This slowdown was primarily due to temporary factors, such as seasonal patterns and the large winter storms that moved across the country. Despite the winter storms and the slowdown, we are still seeing consecutive improvements in affordability. In fact, January marked the seventh consecutive month of improvement in terms of affordability, and we expect home sales to pick up again as we head into Spring.
So, Are We Really in a Buyer’s Market?
Nationally, conditions are leaning toward a buyer’s market, though we are not fully there yet. As always, real estate is highly localized, and market dynamics can vary significantly by region. That said, affordability is improving in many areas. In 57.7 percent of counties across the United States, owning a home is more affordable than renting a three-bedroom.
Looking more closely at the data from ATTOM, the Midwest and South are seeing the largest number of affordable counties. The share of counties where owning is more affordable than renting a three-bedroom home breaks down as follows:
- Midwest: 81.5%
- South: 66.3%
- Northeast: 48.8%
- West: 16.9%
Homebuyers in the Midwest and South are more likely to find affordable counties to purchase homes in, compared to those who are looking to buy in the Northeast or West.
Key Takeaways:
- Mortgage rates have dropped to their lowest levels since 2022.
- Home sales slowed in 2025, leaving homes on the market longer.
- The 2026 housing market is beginning to shift in favor of buyers.
- While the year started with a slowdown, housing market activity is expected to increase throughout 2026.
- Home affordability is coming back into the market, especially in most counties throughout the Midwest and the South.
Every market behaves differently, which is why working with a knowledgeable local home loan officer matters. At Evergreen Home Loans™, we focus on helping buyers understand their purchasing power, evaluate financing options clearly, and build a strategy that helps them compete with confidence. Programs like our Security Plus Seller Guarantee® strengthen your offer by giving sellers added certainty, helping you stand out in competitive situations.
Whether you are preparing to buy this year or simply exploring your options, having a strategy in place makes all the difference. If you are considering your next move, we are here to help you understand what today’s market means for you and your goals.
