🏡 The Housing Market Is Turning a Corner Going into 2026

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

It’s not a sudden boom — but it is a steady shift. One that’s laying the foundation for a stronger, more balanced housing market in 2026.

So, what’s behind the comeback? Let’s look at three key trends shaping the housing market right now.

1. Mortgage Rates Are Finally Trending Down

Mortgage rates naturally fluctuate — that’s nothing new. But after a period of steady highs, the bigger picture is finally pointing in a better direction.

Over the past year, rates have been gradually declining, with the most favorable levels we’ve seen in 2025.

According to Sam Khater, Chief Economist at Freddie Mac:

“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.”

And those savings are making a real difference.

Recent data from Redfin shows that a buyer with a $3,000 monthly budget can now afford about $25,000 more home than they could just a year ago.

💡 What this means for you: lower borrowing costs, higher buying power, and more opportunity to make a move — whether that’s upsizing, downsizing, or finally buying your first home.

2. More Homeowners Are Listing Their Homes

Remember the “lock-in effect”? When homeowners stayed put because they didn’t want to give up their ultra-low mortgage rates?

That’s starting to change.

As rates ease, more homeowners are deciding it’s time to move — whether due to lifestyle changes, job relocations, or growing families.

According to Realtor.com, the number of homes for sale has climbed to levels not seen in nearly six years.

That’s big news for buyers.

More listings mean more options — and a market that’s slowly moving back toward balance. For sellers, it also means a healthier, more active pool of motivated buyers.

3. Buyers Are Coming Back

With improved affordability and more homes to choose from, buyer activity is picking up again.

The Mortgage Bankers Association (MBA) reports that purchase applications are higher than this time last year — a clear sign that demand is building.

And economists agree this momentum will continue. Forecasts from Fannie Mae, the MBA, and the National Association of Realtors (NAR) all point to moderate sales growth heading into 2026.

It won’t be an overnight recovery — but it’s steady, sustainable progress. And after the last few years, that’s exactly what the market needs.

The Bottom Line

After several slower years, the housing market is turning a corner.

✅ Mortgage rates are coming down.

✅ More homeowners are listing their properties.

✅ Buyers are getting back into the market.

The result? A housing market that’s regaining momentum as we move into 2026.

If you’ve been waiting for the right moment to buy or sell, now’s the time to start planning your next move.

Let’s connect and talk about what’s happening in your local market — and how you can make the most of this shift heading into the new year.

Insights originally shared by Keeping Current Matters. Local perspective and commentary by Yvonne Yang, Top Bay Area Realtor®.