New Home Sales Surge to a Four-Year High
December closed the year on a high note. New home sales reached their strongest pace in nearly four years, fueled largely by a meaningful dip in mortgage rates. When financing costs ease, demand responds, and that is exactly what we saw. If rates continue to stabilize or trend modestly downward, it will provide meaningful support to housing activity throughout 2026.
Pending Sales Pause, Weather Likely the Culprit
January pending home sales softened overall, though the story varies by region. The Midwest and West posted gains, while the Northeast and South experienced slower activity, likely the result of extreme cold, snow, and ice disrupting showings and mobility. Historically, weather related slowdowns tend to rebound quickly once conditions normalize.
Notably, with mortgage rates hovering near 6%, there are an estimated 5.5 million additional households who now qualify to purchase compared to last year. Even modest participation from that group could meaningfully impact demand this spring.
A “K-Shaped” Housing Market
The 2026 market is not uniform. It is divided geographically and economically.
The North and South Contrast
The Midwest and Northeast remain supply constrained markets, characterized by limited inventory and relatively short days on market. By contrast, many Sunbelt markets have experienced a meaningful rise in inventory, leading to longer market times and moderated pricing.
This divergence has created two distinctly different seller and buyer experiences depending on location.
“Job Hugging” and Limited Mobility
While unemployment remains low, hiring activity has slowed. Many homeowners are choosing stability over relocation, a trend often referred to as “job hugging.” The result is that mobility remains restrained, and inventory growth is steady but controlled rather than surging.
Inventory Snapshot
Nationally, approximately 690,000 single family homes are currently listed for sale, up 8.2% year over year. However, the pace of new inventory growth is slowing. In some previously overheated markets, supply levels have already peaked and are beginning to taper.
What This Means for You
For Sellers: Strategy Matters More Than Ever
The hyper accelerated conditions of the pandemic era are firmly behind us. Pricing must be intentional and data driven.
• Homes that missed the mark last fall are returning to market with average price adjustments of roughly 3%.
• Today’s buyers are analytical and selective. Precision pricing, strong presentation, and thoughtful marketing are essential to generating momentum.
Success now comes from positioning, not patience.
For Buyers: A Window of Leverage
In many markets, buyers have more negotiating power than they’ve had in years.
• There is no evidence of a widespread crash or an impending flood of distressed inventory.
• With rates stabilizing and incomes gradually rising, affordability has improved compared to recent peaks.
For well qualified buyers, this may represent a strategic entry point before demand accelerates again.
As always, the national narrative tells only part of the story. Real estate remains intensely local, and strategy should reflect that. If you would like a tailored analysis of how these trends apply specifically to your neighborhood or property, I would be delighted to prepare one for you.
