Happy New Year! I hope your 2026 is off to a wonderful start. As I’ve been settling into the year this week, I’ve been looking closely at the year-end data for 2025, and I have to tell you—there is a lot of “green” on the screen.
If you’ve been waiting for a sign that the housing market is finding its footing, this is it. We finished 2025 with the lowest mortgage rates of the entire year, with the 30-year fixed rate averaging down another .03 percent. To put that in perspective, we started last year closer to 7 percent, and average rates as reported by Freddie Mac are almost 1 full percentage point lower than that to end the year. That shift alone is opening doors for so many families who felt sidelined just twelve months ago.
Why the “Vibe” in the Market is Shifting
It’s not just about the headline rates; it’s about how “efficient” the market is becoming. You might hear us geeks talk about the “spread” between the 10-year Treasury and mortgage rates. In plain English: the extra cushion investors demand to hold mortgage debt has shrunk significantly. This means pricing is getting more predictable and less volatile, which is a huge win for your wallet.
We are already seeing this translate into action. Pending home sales just hit their strongest pace in nearly three years. People aren’t just looking anymore; they are signing contracts.
Affordability is Finally Catching Up
For the first time since 2022, housing affordability has hit a three-year high. While we aren’t back to “pre-pandemic” prices, the “one-two punch” of skyrocketing prices and rising rates has finally lost its steam. In fact, home price growth slowed to a crawl at the end of the year (just 0.6 percent nationally), and inventory is slowly creeping up.
Of course, real estate is always local. If you’re looking in Florida or Texas (like Austin or Miami), you’ll find more “wiggle room” and cooling prices. Meanwhile, markets like Chicago or Boston remain a bit more competitive.
A Quick Look at the Week Ahead
This is a big data week! We are keeping a close eye on the December Jobs Report and private payrolls. The Federal Reserve watches these numbers like a hawk to decide what to do with interest rates next. If the labor market stays steady but “cool,” it could pave the way for even more stability in rates as we head into the spring buying season.
A Special Note for My Renters & Dreamers
If you are currently renting, I want you to know there is a path forward. A recent study showed that nearly half of renters expect to be ready to buy within the next four years. With new tools that allow your on-time rent payments to help boost your credit score, getting “mortgage-ready” is more achievable than ever.
Whether you are:
• Thinking about how these lower rates might affect your current equity.
• Wondering if now is the time to jump back in.
• Looking to update your own clients on the “state of the union.”
I am here to help. I’ve always believed that “life happens” moments—marriages, new babies, or job changes—should drive your housing moves more than the daily news cycle. But it sure is nice when the market starts cooperating with our plans!
Would you like me to run a quick “affordability check” to see what your specific numbers look like in this new, lower-rate environment? If so, call/text me at 818.307.6072 and let me know.
