I hope you’ve been enjoying a wonderful holiday season filled with warmth, family, and maybe a little bit of relaxation! As we wrap up 2025 and look toward the new year, I’ve been keeping a close eye on the latest market shifts so you don’t have to.
It’s been a bit of a “gift-wrapped” week for the housing market, with several indicators suggesting that 2026 is setting up to be a much more balanced and friendly environment for buyers, sellers, and homeowners alike.
The “Asterisk” on Economic Growth
You may have seen headlines about a massive 4.3 percent jump in GDP for the third quarter. While that sounds like the economy is “running hot,” it’s important to look under the hood. Much of that data was skewed by the government shutdown earlier this fall. When we peel back the layers, we see that while we’re still spending on essentials and travel, businesses are becoming a bit more cautious.
Why does this matter to you? This “cautious growth” is actually good news for interest rates. It signals to the Fed that they don’t need to keep rates aggressively high to cool things down. We’re already seeing the results: 30-year mortgage rates recently dipped to a two-month low. To put that in perspective, average mortgage rates are nearly a full percentage point lower than they were this time last year!
Big Moves and “Smart Money”
One of the most interesting things I’m watching right now isn’t just the rates themselves, but where the “big money” is betting. Institutional investors have been placing massive $80 million bets that Treasury yields will continue to stabilize or drop as we head into January. This kind of professional confidence often acts as a precursor to more stability in the mortgage market.
A Brighter Landscape for 2026
If you’ve been sitting on the sidelines, here are three reasons to feel optimistic about the coming months:
• More Options: Inventory has surged faster than expected. We ended the year with about 1.3 million active listings—a huge jump from the “scarcity” years we’ve recently endured.
• Price Sanity: Home price growth has moderated to a manageable 2.4 percent. We’re moving away from the “bidding war” frenzy and toward a market where sellers have to be more realistic, and buyers have more room to breathe.
• Building Momentum: Pending home sales just saw their strongest performance in nearly three years. People are moving again—not just because of rates, but because “life happens” (marriages, new babies, and job changes).
Looking Ahead
Next week will be a big one as we get fresh inflation data. If that data stays cool, the constructive trend for mortgage rates should continue.
Whether you’re a client looking to finally make that move, a partner helping folks navigate this transition, or a friend just curious about your home’s value, I’m here to help you make sense of it all. Let’s make 2026 your best financial year yet.
Wishing you a Happy New Year!
