As the holiday season kicks off, The housing market is showing surprising strength this holiday season, defying 2025's pessimistic forecasts.
Demand is Firming—Thanks to Lower Rates
Housing activity is picking up as mortgage rates dip below the critical 6.64% threshold, heading toward 6%. Weekly pending home sales data shows consistent positive growth, marking nine straight weeks of gains. This aligns with historical trends: lower rates quickly move the needle when starting from historically low sales levels.
The Crash That Didn’t Happen
Contrary to doom-and-gloom predictions, home prices have largely held steady. Buyers were waiting for rate clarity, not massive discounts. The market is not collapsing; it’s simply balancing supply and demand in a low-rate environment.
Why Rates Are Stabilizing
Mortgage rates are being supported by a cooling labor market. Recent data shows the U.S. adding an average of just 39,000 jobs per month over the past five months, compared to over 200,000 per month last year. This slowdown signals to the Federal Reserve that inflation is under control, prompting speculation about potential rate cuts and keeping borrowing costs lower for buyers.
2026 Outlook: Inventory Rising
The so-called “mortgage rate lockdown,” where sellers delayed moving, is easing. Inventory is rising year-over-year, offering buyers more options and negotiating power. With price growth slowing and more homes coming onto the market, 2026 is shaping up to be a balanced year for buyers.
