The Housing Market Is Gaining Momentum Heading Into 2026

After years of high mortgage rates and cautious buyers, the housing market is finally showing signs of renewed momentum. Sellers are returning, buyers are re-engaging, and for the first time in a while, there’s real movement again.

No, it’s not a surge—but it is a meaningful shift that could set the tone for a stronger market in 2026.

Here are three key trends driving the comeback:

1. Mortgage Rates Are Trend­ing Down

Rates will always fluctuate, especially with today’s economic uncertainty, but the bigger picture is what matters. Overall, mortgage rates have been trending down for most of the year—and the past few months have brought the best rates of 2025.

As Sam Khater, Chief Economist at Freddie Mac, notes:

“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.”

Lower rates mean more buying power. Redfin data shows that a buyer with a $3,000 monthly budget can now afford about $25,000 more home than they could a year ago. That’s one of the reasons activity is picking up.

2. More Homeowners Are Listing Again

For years, many homeowners stayed put because they didn’t want to give up their low mortgage rate—creating the “lock-in effect.” But as rates ease, more homeowners are choosing to move for life-driven reasons, and it’s boosting inventory.

Realtor.com data shows inventory has grown significantly and is approaching levels not seen in six years. This is great news for buyers who’ve had limited options for too long, and it brings the market closer to balance.

3. Buyers Are Coming Back

With more homes to choose from and slightly improved affordability, buyers are returning as well. The Mortgage Bankers Association reports that purchase applications are up over last year—clear evidence that demand is building.

Economists from Fannie Mae, MBA, and NAR all expect moderate sales growth as we move toward 2026.

Bottom Line

After several slower years, the market is finally turning a corner. Falling mortgage rates, rising inventory, and growing buyer demand all point to steady progress ahead.

If you’re thinking about buying or selling, now is a great time to connect with a local real estate agent and plan for what’s coming in 2026.