February 2026 Housing Market Update: The Reality of "Rebalancing"

If you’re waiting for either a market crash or a sudden boom, you’re going to be waiting a while. This isn't a market of "big moves"—it’s a market of small, calculated shifts. Mortgage rates are hovering near 6%, buyers are finally finding some breathing room, and sellers are learning (the hard way) that "guessing" on a price is a recipe for failure.

The theme right now is leverage. In some pockets, buyers have it for the first time in years. In others, the pace is actually accelerating. But across the board, the days of sloppy pricing and "let's just see what happens" are officially over.

That’s exactly why Nuvision puts this report together each month. National headlines only tell part of the story. What matters is what’s happening where you actually live — and what that means before you make your next move.

Steven Thomas – Orange County: Precision Pricing Is Everything

Steven Thomas’ latest update makes one thing clear: pricing discipline matters again.

In January, 66% of all closed sales in Orange County sold below their original list price. That’s the highest level since January 2023. Homes that closed below their original asking price averaged 95% of that price — which means a $1 million listing typically sold around $950,000.

• Priced Right: If you hit the mark, homes are moving in a median of 8 days.
• Priced High: If you have to cut the price, you're looking at a median of 93 days on market and still likely closing $25,000 below your final list price. On a $1 million home, missing the mark early can easily result in a $50,000 loss compared to those who priced accurately from day one.

Inventory rose to 3,354 homes, up 6% in recent weeks. At the same time, demand surged 19%, pushing Expected Market Time down from 75 days to 67 days. Luxury homes above $2.5 million remain slower, sitting at 151 days of market time. The takeaway is simple: homes priced correctly are moving. Homes priced optimistically are sitting.

Zillow: Rates easing, prices mostly flat, slow rebalancing

Zillow’s current story is “small wins.” Their February 2026 forecast expects the market to gradually rebalance in 2026 as mortgage rates moderately ease. They’re projecting home values up about +0.9% by the end of 2026 and existing home sales around 4.2 million (up about +3.9% from 2025). In plain English: not a boom year, but not frozen either.

On affordability, Zillow makes an important point: the pain is real, but it’s started to loosen slightly. They say the typical mortgage payment is 8.4% lower than a year ago, and they project that by the end of this year a typical home may once again be affordable to a median-income household in 20 major U.S. markets.

Zillow also frames the bigger structural issue: housing supply. Their research puts the U.S. short by about 4.7 million homes, which is why affordability has been such a grind.

Redfin: Buyer’s market conditions and negotiating power

Redfin’s national data says prices are still rising, but barely. The median U.S. home sale price in January was $422,921, up 1.1% year over year. They call it the strongest buyer’s market in recent history for people who can actually afford to buy.

The negotiating power shows up in the numbers: the typical home sold for 2.1% less than its final list price, and only 20.8% sold above final list price in January. Redfin also points to the slow pace of sales: the typical home that went under contract took 66 days in January, the slowest January pace in a decade. Nearly 40,000 purchases were canceled in January, this is 13.7% of homes that went under contract.

National Association of Realtors: People Still Aren’t Moving

Mortgage rates recently dipped to about 6.01%, the lowest level in over three years. According to the National Association of Realtors, about 5.5 million additional households can now qualify for a mortgage compared to when rates were near 7%. But buyers aren’t rushing in.

Pending home sales were down 0.8% month-over-month and 0.4% year-over-year in January. Existing home sales fell 8.4% from December. Historically, roughly 10% of newly qualified buyers enter the market after rate drops. That could mean about 550,000 additional buyers nationally this year — a steady increase, not a surge.

Regional Snapshots: A Mixed Bag

The "one-size-fits-all" market is gone. Every city is behaving differently:

Southern California: Prices in Anaheim and LA are down slightly (0.6%), with homes taking about 10 weeks to sell on average. San Diego is the outlier, with prices up 0.8% and a faster 46-day pace.

The Bay Area: It’s a game of extremes. San Jose prices dropped 5.6%, while Oakland saw a slight rise. Pending sales are down over 20% across the region.

Alaska: Alaska is marching to its own beat. Prices are up 5.4% year-over-year, and while sales volume has dipped 12.3%, values remain incredibly firm. If you’re selling in Alaska, you’re still likely to get your asking price (1.000 sale-to-list ratio). Median days on market rose to 56 days.

Arizona: Phoenix-Mesa-Chandler saw pending sales rise 11.8% year over year, showing renewed activity.

What This Means for our Members

Across Southern California, the Bay Area, Arizona, and Alaska, the message is consistent: the market isn’t frozen. Mortgage rates are lower than they were a year ago. Affordability is slowly improving. But buyers are careful, and sellers have to be strategic. The easy wins are gone. Smart moves are still there.

Real estate isn’t just about prices and percentages. It’s about timing a move, refinancing at the right moment, deciding whether to sell, or figuring out if now makes sense to buy. And those decisions are rarely simple.

Every month, we pull this together because our members are having these conversations right now. They’re weighing options. They’re watching rates. They’re asking, “Does this make sense for me?” National headlines don’t answer that. Local context does. We put this report together so you can see the pace of your market and make a decision with information — not guesswork.