The Nadlan Group Real Estate Podcast

Housing Market Outlook 2026 Slow Growth Ahead as Buyers Return and Rate Pressures Ease

Mortgage and housing activity is finally showing signs of recovery after two slow years, and experts expect 2026 to bring more momentum. According to MBA Chief Economist Michael Fratantoni, the improvement will be gradual, not dramatic, but the direction is finally positive.
 
The Mortgage Bankers Association is projecting an 8% increase in single-family mortgage originations, reaching about $2.2 trillion in loan volume and 5.8 million loans. While that looks healthy in dollar terms, the number of loans shows the market is still cooling compared to past decades. Even so, home sales—both new and existing—are expected to rise about 5% next year as inventory improves and more buyers return.
 
One of the biggest drags on activity, the rate lock-in effect, is finally loosening. Millions of homeowners still hold 2–4% mortgage rates, but more are choosing to move anyway due to life changes like marriage, children, divorce, or job relocation. At the same time, nearly 50 million millennials are now in peak homebuying age, which will continue to fuel demand in 2026.
 
Mortgage rates remain the wildcard. The MBA’s baseline forecast assumes 6.25%, but rates could drift either direction. If the economy softens and unemployment rises, rates could fall toward 6% — and if inflation heats up again, they could move toward 7%. A drop into the low 5s could push loan volume up sharply, even toward $2.8 trillion, while a rise of one full percentage point would pull activity below $2 trillion.
 
Borrower behavior is also shifting. Adjustable-rate mortgages (ARMs) are gaining traction again — already about 10% of new loans — because they’re often a full percentage point cheaper than fixed rates. And while the Fed is expected to cut rates again in December and early 2026, officials remain divided as the labor market cools.
 
The biggest risk for next year is rising delinquencies. Unemployment is expected to increase from 4.3% to around 4.7%, and because hiring has slowed and layoffs are picking up, distress could become more visible. Unlike the red-hot markets of 2020–2022, today’s slower market means struggling borrowers may not be able to sell quickly, leading to more long-term delinquencies and a modest uptick in foreclosures. Some of those distressed homes could become rare sources of new inventory next year.
 
Overall, 2026 is shaping up to be a slow but steady recovery. Origination volume should increase, inventory will continue improving, and first-time buyers — especially millennials — will play a growing role. But the outlook still depends heavily on interest rates, job stability, and how buyers and sellers adapt to a very different post-pandemic housing cycle.
 
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#HousingMarket2026 #MortgageRates #RealEstateTrends #MBAForecast #Homebuyers

Mortgage Rates Slip Slightly, Staying Locked in Same Tight Range

Mortgage rates ticked slightly lower on Friday, but the movement was barely noticeable — continuing the tight, sideways pattern that has dominated the market for nearly a month. Despite sharp swings in the stock market, mortgage rates have remained stuck in the same narrow range since late October, showing little interest in making a meaningful move up or down.
 
Stocks have been sliding, and although stock declines don’t always drive mortgage rates, big sell-offs can push investors into the bond market. That’s exactly what happened heading into Friday, with bonds strengthening overnight and pressuring rates downward. But the trend didn’t last. At around 7 a.m., New York Fed President John Williams suggested that a rate cut at the December meeting was still “very much on the table.” His comments initially boosted the bond market — as lower Fed policy rates typically support lower long-term rates — but they also triggered a rebound in stocks.
 
And when stocks push higher, bonds often weaken. That tug-of-war erased much of the overnight improvement, but not all of it. The bond market had built up enough momentum earlier in the morning to leave mortgage rates slightly better than Thursday, even after the reversal.
 
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#MortgageRates #HousingMarket #InterestRates #BondMarket #RealEstateNews

Existing Home Sales Tick Higher in October, but Falling Supply Adds New Pressure

Existing-home sales showed a modest lift in October as buyers took advantage of a brief window of lower mortgage rates late in the summer, but the improvement may be short-lived. NAR reported that sales rose to a 4.1 million annual pace — a 1.2% month-over-month increase and 1.7% higher than last year — largely reflecting contracts signed in August and September before the government shutdown slowed parts of the lending process. During that period, mortgage rates eased from 6.63% to as low as 6.13%, giving buyers temporary breathing room before drifting back toward the mid-6% range.
 
However, the boost in activity is already running into inventory constraints. After months of gradual improvement, the supply of homes for sale slipped to 1.52 million, a decline of 0.7% from September. Even with inventory still up nearly 11% year over year, today’s levels remain tight and continue to support steady price gains. October’s median existing-home price climbed to $415,200 — up 2.1% from a year earlier — marking the 28th consecutive month of annual increases. Economists note that even slight rate improvements can help buyers, but affordability remains stretched, keeping overall sales historically low.
 
Homes are also taking longer to sell, staying on the market for an average of 34 days compared with 29 days a year ago. This slower pace underscores a calmer, more deliberate market where buyers can weigh choices rather than rush into decisions. First-time buyers made up 32% of purchases, a noticeable improvement from last year, though regional differences remain stark: the Northeast still suffers from a severe lack of listings, the West faces extreme price barriers, and the Midwest and South offer the best mix of supply and affordability for entry-level purchases.
 
High-end homes continue to dominate sales growth. Transactions above $1 million jumped 16% year over year, and homes between $750,000 and $1 million rose 10%. Meanwhile, more budget-friendly segments saw little movement or even declines, highlighting how wealthier buyers are driving much of the current demand while more price-sensitive shoppers remain constrained by elevated borrowing costs.
 
Overall, October’s uptick shows that buyers respond quickly when rates dip, but the market’s larger structural challenges persist. If mortgage rates drift lower again toward the end of the year, demand could strengthen further — but unless inventory rises instead of shrinking, any recovery in sales is likely to be gradual and uneven heading into 2026.
 
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https://www.forumnadlanusa.com/2025/11/existing-home-sales-see-small-october-gain-as-housing-supply-slips-again/
#HousingMarket #HomeSales #RealEstate2025 #MortgageRates #AffordabilityCrisis

Cleveland Fed’s Hammack Signals Support for Holding Rates at Current “Barely Restrictive” Level

Cleveland Federal Reserve President Beth Hammack signaled that the Fed may be approaching the end of its current rate-cut cycle, arguing that monetary policy is no longer meaningfully restrictive. In an interview with CNBC, she said the federal funds rate—now between 3.75% and 4%—is close to a “neutral” level that neither stimulates nor slows the economy. Her comments underscore a growing divide inside the Fed, with some policymakers increasingly hesitant to cut deeper while inflation progress remains uneven.
 
Hammack emphasized that her priority is keeping inflation on a clear path back to 2%, even if the job market shows signs of cooling. She noted that many households and businesses she speaks with still feel squeezed by higher prices, despite official inflation data showing gradual improvement. Families, she said, are sharing the same story: their paychecks are not stretching as far, and everyday goods cost significantly more than they did just a few years ago. This persistent financial strain influences her belief that policy must remain “somewhat restrictive” to avoid any resurgence in price pressures.
 
Her comments come just weeks before the Fed’s December 9–10 meeting, where the outlook for another rate cut has become increasingly uncertain. Markets once viewed a December cut as nearly guaranteed, but the odds have fallen to about 60% as policymakers signal mixed views. Minutes from the Fed’s October meeting highlight the tension: some officials worry that hiring is slowing and unemployment is rising, while others warn that inflation progress is still too fragile for aggressive easing. Hammack, who leans hawkish and will vote on policy next year, clearly aligns with the latter group.
 
The newly released September jobs report added further complication. Payrolls rose more than expected, suggesting continued resilience, yet the unemployment rate edged higher—a conflicting combination that reinforces the Fed’s dilemma. Hammack described the data as “mixed,” arguing that the central bank must weigh the full picture rather than reacting to a single month.
 
Her broader message for 2026 is that the era of rapid rate cuts may be nearing an end. If the current policy stance is already close to neutral, the Fed may need to pause soon to avoid overstimulating the economy. Hammack believes rates should not fall much further unless inflation shows more convincing improvement, even as parts of the job market begin to soften. Her outlook adds momentum to the cautious camp inside the Fed, hinting that rate cuts in 2026 could be slower, smaller, and more data-dependent than many previously expected.
 
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https://www.forumnadlanusa.com/2025/11/cleveland-feds-hammack-suggests-holding-rates-steady-as-policy-nears-neutral-zone/
#FederalReserve #InterestRates #InflationWatch #Economy2025 #MonetaryPolicy

Homebuyer Regret Drops as Slower Market Gives Buyers More Confidence

Buyer regret is falling sharply in today’s slower, more balanced housing market, according to a new Realtor.com analysis. One of the biggest sources of stress in recent years—feeling like they overpaid—has dropped to just 8% in 2025, down from 15% in 2023. With homes now sitting on the market longer and buyers having more room to think clearly, almost 37% of recent purchasers say they have no regrets at all, a notable increase from just two years ago. The fast-paced, bidding-war environment of the pandemic era has cooled significantly, giving buyers the time and options they lacked before.
 
But even with confidence rising, certain pain points remain—especially around the ongoing financial and maintenance responsibilities of homeownership. Many buyers, especially younger ones, still struggle with unexpected upkeep, higher-than-anticipated spending on household items, and stretched budgets. Millennials and Gen Z report the most financial strain, with a higher likelihood of draining savings or feeling unsure about long-term costs. Meanwhile, Boomers emerged as the most satisfied group, with 60% reporting zero regrets, reflecting their stronger financial positions and more experience in homeownership.
 
Generational differences also shape the type of regrets buyers feel. Younger buyers were more likely to skip inspections, worry about future interest rates, regret choosing the wrong neighborhood, or feel that their home ended up being too small or too far from work. These issues often stem from tight budgets and limited inventory in their price range. Older generations, by contrast, were more focused on practical concerns like maintenance or routine expenses rather than emotional or financial second-guessing.
 
Overall, the study shows a clear shift in the buyer mindset. The slower pace of today’s market is helping people make more thoughtful decisions, leading to fewer rushed purchases and far fewer regrets about price, condition, or location. Even though affordability challenges remain, buyers are entering transactions more informed, more cautious, and more financially prepared. With more time to evaluate homes and less pressure to compete aggressively, satisfaction is rising, and the post-purchase experience is becoming more positive for a growing number of buyers.
 
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https://www.forumnadlanusa.com/2025/11/homebuyer-regret-drops-as-slower-market-gives-buyers-more-confidence/
#HousingMarket2025 #HomebuyerTrends #RealEstateInsights #BuyerRegretDrops #HomeownershipJourney

Existing Home Sales Inch Higher but Stay Near Historic Lows

Existing-home sales in October showed a slight but meaningful improvement, rising 1.2% to a 4.10-million annual pace, a level that is 1.7% higher than last year but still far below historical norms. Easing mortgage rates helped bring more buyers back into the market, even as the recent government shutdown temporarily disrupted economic data and delayed decision-making for some. NAR Chief Economist Lawrence Yun said lower borrowing costs gave shoppers a bit more flexibility, but he emphasized that the market remains divided by region. The Northeast continues to face extremely tight supply and fast-rising prices, the West remains constrained by high home values that keep many buyers from qualifying, while the Midwest and South posted steadier gains thanks to better affordability and a rising number of homes for sale.
 
Nationally, inventory reached 1.52 million homes, up nearly 11% from a year earlier, offering more options for buyers who had been stuck with limited choices for years. Still, supply remains below what is considered healthy, and the typical home spent 34 days on the market—slightly longer than last year as buyers remain cautious. Prices continued their long climb, with the median existing-home price hitting $415,200, marking the 28th straight month of annual increases. First-time buyers made up 32% of purchases, a small improvement but still lower than historical averages, while cash buyers and investors continued to play a notable role.
 
The October numbers suggest that the market may be settling into a new floor rather than slipping further. Softer mortgage rates, slowly improving affordability, and rising new listings are helping stabilize activity after two years of unusually weak sales. Still, high prices and ongoing rate lock-in among existing homeowners mean that any recovery will be gradual rather than sudden. If mortgage rates continue to drift lower into early 2026, analysts expect small but continued gains—but a true rebound will require both stronger affordability and more homeowners willing to list their properties.
 
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https://www.forumnadlanusa.com/2025/11/existing-home-sales-inch-higher-but-stay-near-historic-lows/
#HousingMarketUpdate #ExistingHomeSales #RealEstateTrends #MortgageRates #HomeBuying2025

New Home Listings Move Closer to Pre Pandemic Levels as Inventory Slowly Recovers

The latest data from First American shows that the U.S. housing market is slowly working its way back toward normal, even as sales remain stuck at a subdued pace. Existing-home sales continue to hover around a 4-million-per-year rhythm, a level far below the peaks of the pandemic boom and well under pre-2020 averages. Buyers remain active, but affordability challenges, high prices, and elevated mortgage rates are still holding back the number of completed transactions. Even so, one positive trend is becoming clearer: new listings are gradually returning, giving buyers more fresh options than they’ve seen in several years.
 
This improvement is important because the 2018–2019 period represents one of the last stable benchmarks before the pandemic reshaped housing dynamics. At that time, supply, demand, and mortgage rates were more closely aligned. By comparing today’s new listing counts against those earlier years, analysts can better understand how far the market has progressed after several years of extreme volatility.
 
Across the country, the rise in new listings is helping support a slight pickup in sales. As Odeta Kushi, Deputy Chief Economist at First American, noted, when more owners choose to list their homes, it creates more opportunities for buyers and helps the market move toward better balance. To get a clearer picture of where the market stands, First American evaluated October 2025 sales and new listings across 75 major metros and compared them with each area’s own 2018–2019 averages. Instead of looking only at total inventory—which can rise simply because homes sit longer—this method focuses on the number of fresh listings coming onto the market, giving a more accurate sense of new supply.
 
The results show a wide range of market conditions. Some metros, including Pittsburgh, Knoxville, and Virginia Beach, are closest to their pre-pandemic norms for both sales and new listings. These pace-setter markets tend to be in more affordable regions of the country and appear to be leading the overall normalization trend. In other areas—especially across the Northeast and Midwest—demand is healthier than supply, meaning sales are nearer to normal levels than listings. Markets like Boston and Detroit fall into this category and could quickly shift if more homeowners decide to list.
 
In contrast, many southern metros are seeing more normal levels of new listings, but buyer demand hasn’t fully caught up. Areas like San Antonio and Tampa have improved supply but still face affordability challenges and economic factors that slow buyer activity. Meanwhile, much of the West remains stuck in neutral, with both sales and listings lagging well behind pre-pandemic norms. Metros such as Los Angeles and Portland continue to face affordability pressures, weaker population growth, and slower sales momentum.
 
Despite these regional differences, the nationwide improvement in new listings remains a positive sign. As supply gradually recovers, it helps reduce some of the pressure buyers have faced over the past three years. First American’s Existing-Home Sales Outlook for October reflects this shift, projecting a 0.3% month-over-month increase in sales and a 1.1% annual increase. A resilient economy, a slow easing of the rate-lock effect, and a small boost in purchasing power are all contributing to the modest rise.
 
While the housing market still faces significant affordability barriers and sales remain far below historic averages, the steady increase in new listings provides a foundation for future stability. If supply continues climbing through 2026—and mortgage rates gradually decline—the market could slowly move toward a healthier balance, offering more opportunities for both buyers and sellers after several years of severe constraint.
 
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https://www.forumnadlanusa.com/2025/11/new-home-listings-move-closer-to-pre-pandemic-levels-as-inventory-slowly-recovers/
#HousingMarket2025 #RealEstateUpdate #HomeInventory #MortgageTrends #MarketRecovery

Mortgage Originations Slip in Q3 as Homebuyers Pull Back, But Refis and HELOCs Gain Ground

U.S. mortgage activity slowed slightly in the third quarter of 2025, but the overall picture remains one of quiet stability rather than a sharp downturn. ATTOM’s latest mortgage origination report shows the market softening at the surface while underlying segments—especially refinancing and home-equity borrowing—continue to grow. The result is a mixed but steady environment as the industry transitions into the final quarter of the year.
 
A total of 1.77 million mortgages were originated in Q3, down 1.6% from the previous quarter but still nearly 2% higher than last year. ATTOM CEO Rob Barber described the period as cautious but stable, noting that homeowners are increasingly willing to refinance or tap equity even as aspiring buyers continue to run into affordability barriers. Loan volume reached $600.4 billion, just slightly below Q2’s level but comfortably above 2024 totals.
 
The biggest drag on activity came from purchase loans, which fell almost 5% from Q2 and more than 6% year over year. That reflects the reality buyers are facing: high prices, elevated mortgage rates, and limited inventory in many regions. Major metros like Austin, Atlanta, and Dallas saw some of the steepest drops in purchase demand, underscoring how stretched buyers are in fast-growing Sunbelt markets. But not all markets slowed. Cities such as Buffalo, New York, Cleveland, Rochester, and Philadelphia posted gains, helped by more stable pricing and slightly improved inventory.
 
Refinancing continued to move in the opposite direction. Even with modest rate cuts, refi activity increased for the fourth straight quarter. Homeowners are taking advantage of any improvement in rates to secure better terms, pushing refinance originations up 12% from last year. Cities like Las Vegas, New Orleans, Phoenix, and Honolulu posted some of the strongest gains.
 
HELOC borrowing remains one of the brightest spots in mortgage lending. Rising home values and tighter budgets have pushed more owners to tap home equity for renovations, debt consolidation, or major expenses. HELOC activity rose nearly 3% from Q2 and more than 4.5% annually, with strong growth in metros like Portland, Virginia Beach, Richmond, Fresno, and Birmingham. These loans now make up nearly one in five mortgage originations—one of the highest shares in years.
 
Government-backed and construction lending edged lower, reflecting softer homebuying and a cooling pace of new-home building. FHA and VA loans both ticked down, and construction loans declined to just over 1% of all originations.
 
Taken together, the Q3 data shows a market that is stable but far from surging. Buyers remain constrained by affordability, keeping purchase activity muted, while homeowners continue to drive lending through refinances and home-equity borrowing. As Q4 begins, the mortgage landscape looks steady and balanced, but momentum will depend on whether affordability improves and rates continue to ease heading into 2026.
 
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#HousingMarket2026 #RealEstateTrends #HomeAffordability #MortgageRates #MarketOutlook

Housing Market Outlook 2026 What to Expect as Affordability Slowly Improves

As the industry looks toward 2026, First American Chief Economist Mark Fleming offers a clear view of what will shape the housing market next year: gradually improving affordability, slowing price growth, and a slow but steady weakening of the rate lock-in effect. Fleming’s outlook emphasizes that the recovery won’t be driven by dramatic interest rate cuts but by steady economic fundamentals and the life events that consistently bring people into the market.
 
Affordability is expected to improve modestly as incomes continue rising and home price growth cools, particularly in markets where values surged the fastest during the pandemic. Some of the over-heated Sunbelt and West Coast markets—like parts of Florida, Texas, and California—are already seeing small price corrections. Fleming calls these shifts normal adjustments rather than signs of a downturn, noting that home values remain far above pre-2020 levels. He says the narrowing gap between what buyers earn and what homes cost will play a larger role in easing affordability than rate cuts alone.
 
A major theme in Fleming’s outlook is that mortgage rates won’t fall far enough to break the lock-in effect that kept millions of homeowners frozen in place. While rate lock-in will still limit inventory in 2026, its influence is slowly fading as more homeowners reach life stages that require a move—marriages, job changes, expanding families, and downsizing. According to Fleming, these life events drive the housing market far more reliably than Fed policy, and they will continue pulling people back into the market even if rates remain in the low-6% range.
 
He also points to negative equity as the key risk to watch. The borrowers most vulnerable are those who bought near the peak with small down payments and didn’t benefit from the rapid price gains of 2020–2022. While today’s equity levels remain strong overall, these pockets of risk could become trouble spots if the economy slows or financial stress rises.
 
When it comes to new forms of homeownership—like shared equity models, co-buying, and fractional ownership—Fleming sees more interest but limited overall impact. These alternatives will help some first-time buyers but won’t transform the market.
 
The biggest threat going into 2026 remains a renewed hit to affordability. That could come from another spike in rates or a reacceleration in home prices. But the biggest upside is the possibility of stronger income growth, potentially supported by productivity gains from new AI and workplace technologies. If wages rise faster than expected, the path to better affordability could accelerate—a shift that would bring balance to the housing market faster than rate cuts alone.
 
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#HousingMarket2026 #RealEstateTrends #HomeAffordability #MortgageRates #MarketOutlook

Mortgage Rates Stay Flat as Jobs Report Sparks a Bond Market Rebound

Mortgage rates ended up holding steady on Thursday, but only because the bond market delivered a perfectly timed rebound at the last possible moment. Heading into the morning, most lenders were prepared to raise rates. Wednesday afternoon brought enough weakness in bond markets that lenders would normally have issued higher pricing, but because the decline happened late in the day, most lenders avoided making adjustments. That meant they entered Thursday with rate sheets that no longer matched the actual state of the bond market, almost guaranteeing rate increases once the morning opened.
 
Everything changed when the September jobs report was released. Bonds immediately strengthened, and the rebound was almost identical in size to the losses seen the day before. This sharp, early rally effectively erased Wednesday’s weakness and brought bond prices back to the same levels lenders based their rate sheets on. Because of that, lenders no longer needed to raise rates—they were already aligned with the new market environment.
 
The movement shows just how sensitive mortgage rates are to real-time shifts in bond trading. Even though the market has been volatile, the jobs-report rally neutralized the prior declines so precisely that lenders were able to keep pricing unchanged. The result was a surprisingly steady day for mortgage rates, despite the choppiness behind the scenes. It was a rare instance where timing—down to the hour—made all the difference for borrowers.
 
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