At A Glance

• The housing market enters 2026 showing early signs of balance after years of volatility.
• Inventory remains tight, but slower price growth and modest gains suggest stabilization.
• Mortgage rates ended 2025 at 6.16%, with the 10-year Treasury at 4.17%.
• Consumer confidence is mixed, while builder sentiment shows cautious improvement.

As 2026 begins, affordability pressures and rate stability remain key themes, but new trends are shaping the outlook. Consumer sentiment is cautious, builder confidence is improving, and inventory movement suggests a gradual shift toward balance.

"We’re seeing a market that’s moving away from extremes," said Brett Hively, Senior Vice President and Mortgage Capital Markets and Financial Strategist at Ameris Bank. "That’s good news for buyers and sellers who value predictability."

Consumer and Builder Sentiment

Surveys show that 40% of Americans planning to buy or sell a home in 2026 worry about a potential downturn, and 98% expect some challenges.¹ According to the latest survey from the National Association of Home Builders, builder confidence ticked up in December to its highest since April, though still below the level signaling broadly favorable conditions.²

"Confidence among builders is improving, even if cautiously," Hively noted. "Incentives are helping keep new construction in play, which is important for easing supply constraints."

Inventory and Pricing Trends

Existing-home sales rose 0.5% month-over-month in November to 4.13 million units, while inventory fell 5.9%.^3,4 Median home prices climbed 1.2% year-over-year to $409,200, signaling stability rather than sharp swings.⁵

"Price growth slowing is a healthy sign," Hively said. "It creates space for buyers to plan without feeling the urgency that drove the market in prior years."

Rates and Affordability

The Federal Reserve’s December rate cut—its third in 2025—lowered the federal funds rate by 25 basis points, while longer-term rates remain elevated, with the 10-year Treasury closing 2025 around 4.17%.^6,7 The average 30-year conforming mortgage rate ended 2025 at 6.16%, and early 2026 data suggests rates will hold near the low-6% range for now.⁸

Affordability conditions have now improved for six straight months as lower mortgage rates and strong household earnings growth have increased prospective buyers’ purchasing power.⁹

“Improving affordability is a positive trend for the market,” Hively said. “Lower rates and stronger household earnings are giving buyers more purchasing power, despite some challenging conditions remaining.”

What This Means for 2026

According to Hively, the start of 2026 brings a market that values strategy over speed.
 

• For buyers: Slower price growth and builder incentives could create openings, especially for those considering new construction or flexible financing options.
• For sellers: Pricing precision matters more than ever as bidding wars fade. Offering concessions, such as funds for interest rate buydowns, can help attract rate-sensitive buyers.
• For the industry: Expect steady activity rather than surges. Regional differences will shape opportunities, making local expertise increasingly important.

Sources:
¹ https://cleveroffers.com/research/housing-market-predictions-2026/
² https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index
^{3, 4} https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
⁵ https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-0-5-increase-in-november
⁶ https://www.federalreserve.gov/newsevents/pressreleases/monetary20251210a.htm
⁷ https://www.cnbc.com/quotes/US10Y
⁸ https://www2.optimalblue.com/obmmi
⁹ https://www.mba.org/news-and-research/newsroom/news/2025/12/18/mortgage-application-payments-decreased-in-november


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.