The Housing Market Is Turning a Corner Going into 2026

After several years of high mortgage rates and cautious buyers, something is shifting beneath the surface of today’s housing market. Sellers are coming back. Buyers are dipping their toes in again. And for the first time in a while, we’re seeing real momentum.

No, it’s not a sudden surge. But it is a steady shift and one that could set the tone for a much stronger market in 2026.

So what’s driving the comeback? Here are the three biggest trends I’m watching right now.

1. Mortgage Rates Are Easing Downward

Mortgage rates naturally rise and fall, that’s normal. And with today’s economic uncertainty, some volatility is expected. But when you zoom out, the overall trend this year has been encouraging: rates have been gradually coming down. Over the last few months, we’ve even seen some of the best rates of 2025.

Sam Khater, Chief Economist at Freddie Mac, explains it well:

“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.”

That’s a big deal for buyers. Lower rates = more buying power.

According to Redfin, someone with a $3,000 monthly budget can now afford about $25,000 more home than they could last year. That’s one of the key reasons we’re seeing renewed activity in the market.

If you’re thinking about buying, this shift may open doors that felt closed even a few months ago.

2. More Homeowners Are Ready To Sell

For years, the “I don’t want to give up my low rate” mindset kept many homeowners firmly planted and inventory extremely tight. But now, as mortgage rates ease and life changes take priority again, more homeowners are choosing to make a move. And that’s showing up in the data. Realtor.com reports that the number of homes for sale has increased significantly, approaching inventory levels we haven’t seen in nearly six years.

More inventory is good news. It gives buyers more options and helps bring the market closer to a healthy balance. If you’re planning to sell, conditions are improving, and buyers are becoming more active again.

3. Buyers Are Re-Engaging

It’s not just sellers making moves. Buyers are stepping back in, too.

The Mortgage Bankers Association reports that purchase applications are up compared to last year, a clear sign that demand is strengthening. Industry experts, including economists from Fannie Mae, MBA, and NAR, expect this momentum to continue into 2026. It won’t be a fast or dramatic comeback, but the steady pace is promising.

If you’ve been waiting for the market to “feel right,” we’re finally heading in that direction.

The Bottom Line

After several slow years, the market is finally turning a corner. Falling mortgage rates, increased inventory, and returning buyers are creating real movement, and opening opportunities for both buyers and sellers.

If you want to understand how these trends affect your plans for 2025 or 2026, I’m here to help. Send me a message or give me a call, I’d love to walk you through your best next steps.