January 2026 Housing Outlook: Housing Market Moves in Small, Positive Steps

What the latest data says—and what it could mean for you

The housing market is showing signs of gradual improvement as we head into 2026. Prices remain stable without sharp increases, mortgage rates are trending lower overall (with some fluctuations), and affordability is slowly improving in more parts of the country. This month’s update pulls together insights from Zillow, Redfin, the National Association of Realtors, and Southern California housing expert Steven Thomas to help put the bigger picture into context for our members.

Zillow: Affordability Is Improving, Slowly but Steadily

According to Zillow, the typical U.S. home value stood at $360,782 in November, essentially flat year-over-year. Rents continue to rise at a modest pace, with the typical rent reaching $1,925, up 2.2% from 2024. New listings declined 4.4% year-over-year, keeping overall inventory tight, while the typical mortgage payment came in at $1,767.

The bigger story from Zillow is the outlook for mortgage rates. Recent government action to purchase mortgage-backed securities has already pushed rates below 6% at times, and Zillow now expects average mortgage rates to land closer to 5.8% in 2026. That may not sound dramatic, but even a small drop can matter. Zillow estimates that a 33-basis-point reduction in rates translates to roughly $60 in monthly savings on a typical mortgage.

Lower rates could also help unlock more listings as homeowners feel less “stuck” in their current loans. At the same time, demand is expected to rise, keeping overall price growth modest. Zillow still expects home values to rise only about 1–2% this year, even as the average sales price increases due to a higher share of transactions in the West and Southwest.

Redfin: A Buyer’s Market Takes Shape

Data from Redfin shows early signs of activity returning as rates dip. Mortgage-purchase applications recently hit a three-year high, and pending home sales declines are shrinking. New listings are also falling at a slower pace than late 2025.

At the same time, buyers have more leverage than they’ve had in years. In December, Redfin found there were roughly 47% more sellers than buyers nationwide—the largest gap on record. Homes are taking longer to sell, averaging about 61 days on the market, which has opened the door for price negotiations, repair requests, and seller concessions.

That said, affordability still limits how many people can step in. The number of active homebuyers fell to the lowest level since records began in 2013. Redfin notes that while rates have come down, many buyers remain cautious, especially those giving up ultra-low mortgages from previous years.

National Association of Realtors: Mixed Signals Heading Into 2026

The National Association of Realtors reported that pending home sales fell 9.3% month over month in December and 3.0% compared to2024. Declines were seen in all regions on a monthly basis, though the South posted year-over-year gains.

NAR points to seasonality and limited inventory as key factors. Inventory ended December at 1.18 million homes—the lowest level of 2025—making it harder for buyers to find the right fit. Still, confidence among real estate professionals is improving. More agents expect increases in both buyer and seller traffic over the next three months, suggesting momentum could build as spring approaches.

Steven Thomas: Southern California Enters the Winter Market

Southern California housing expert Steven Thomas notes that the region has officially entered the Winter Market, which typically begins in mid-January. Buyer demand usually ramps up quickly after the holidays as pent-up demand returns, while inventory typically rises at a slower pace.

Historically, Orange County buyer demand has jumped anywhere from 50% to nearly 70% between mid-January and mid-March, regardless of broader economic conditions. Mortgage rates hovering around 6% to 6.5% are a key reason. Compared to early 2025, today’s rates are about a full percentage point lower, significantly improving affordability for many households.

Thomas expects demand to rise over the next several weeks, even if overall sales remain below long-term norms. In short, activity is picking up—not because the market is overheated, but because buyers are adjusting to a new, more workable reality.

What This Means for Members

Across the board, the story is one of gradual change. Prices are steady, mortgage rates are trending lower, and buyers have more negotiating power than they’ve had in years. It’s not a fast reset, but it is movement in the right direction.

At Nuvision, we keep a close eye on these shifts so we can help members make informed decisions—whether that’s buying, refinancing, or simply waiting for the right moment. Housing decisions are personal, and having clear information makes it easier to plan with confidence.