2026 Housing Market Forecast: What Home Buyers and Sellers Need to Know Now
Real Estate Market Update December 2025 | Housing Market Predictions 2026
As we enter the final weeks of 2025, the real estate market is giving us crucial signals about what to expect in the year ahead. If you're considering buying or selling a home in 2026, understanding these housing market trends now can give you a significant advantage when the spring real estate market arrives.
The Current State of the Housing Market
Home Inventory 2026: Tightening Faster Than Expected
The available housing inventory of single-family homes has dropped to 775,000—a decline of 20,000 homes from just last week. While we're still 13.7% above last year's levels, that's a significant drop from the 30% surplus we saw earlier in the year.
What's particularly noteworthy is the rate of withdrawals. Home sellers are pulling their properties off the market at higher rates than we've seen in recent years. This isn't necessarily bad news—in fact, it could signal pent-up housing demand waiting for the right conditions to materialize in early 2026.
What this means: If you're searching for homes for sale, the inventory squeeze could intensify competition fast.
Home Prices 2026: Softening, But With Signs of Stabilization
The home pricing picture remains mixed but shows some encouraging signs. The asking price per square foot currently sits just over $209, about 1.5% below last year. However, this actually represents an improvement from just a few weeks ago when home values were down closer to 2%.
Here's the reality check: approximately 40% of homes currently on the market have taken price cuts. That's the highest percentage for any December except 2022. For home buyers, this creates opportunity. For home sellers, it means pricing strategy will be more critical than ever heading into 2026.
Buyer opportunity: Motivated sellers and home price reductions create the best real estate buying conditions we've seen in years.
Home Sales Forecast: Building Momentum Into 2026
Despite a slight dip this week to 47,000 pending home sales (below the recent average of 51,000), we're still tracking a couple percentage points above last year. More importantly, we're seeing three-year highs in overall trends, which suggests potential for 5% sales volume growth in 2026.
This momentum is significant because it indicates sustained home buyer interest despite higher mortgage rates and economic uncertainty.
What This Means for Home Buyers and Sellers
If You're Thinking About Selling Your Home in 2026
The data suggests that timing will be everything in 2026. The spring housing market could bring a surge of buyers—similar to what we witnessed in early 2023 when interest rates dipped and demand returned faster than anyone expected.
Key considerations for home sellers:
- Price strategically from day one. With 40% of listings taking price cuts, overpricing could cost you valuable time and momentum
- Watch for early signs of buyer demand returning in Q1
- Consider listing your home slightly ahead of peak spring competition if conditions improve
Best time to sell a house: Early spring 2026 could bring maximum buyer competition and top dollar for your property.
If You're Thinking About Buying a Home in 2026
The current market presents real estate opportunities that may not last. With inventory tightening and price cuts prevalent, motivated sellers are creating windows of opportunity for well-prepared buyers.
Key considerations for home buyers:
- Work with a local real estate agent who understands market dynamics and can identify motivated sellers
- Get pre-approved for a mortgage now so you're ready to act when the right property appears
- Don't wait for "perfect" market conditions—they rarely exist, and competition could intensify quickly in spring
First-time home buyers: Now is the time to position yourself before the spring rush drives up competition and prices.
The Critical Housing Market Questions for Q1 2026
As we move into the new year, three key real estate indicators will tell us which direction the market is heading:
1. Will Inventory Surge or Grow Moderately?
The answer will determine how much negotiating power buyers have in the 2026 real estate market.
2. Will Price Cuts Start Declining as Demand Returns?
This will signal whether we're headed for home price stabilization or continued softness in the housing market.
3. Will Pending Sales Continue Climbing?
Sustained momentum could mean a more competitive spring real estate season than many expect.
Don't Wait to Prepare for the 2026 Housing Market
Whether the market surprises us with a spring surge or continues its measured pace, one thing is certain: those who prepare now will have the advantage. The difference between a good outcome and a great one often comes down to having the right real estate strategy and guidance.
Your 2026 Real Estate Action Plan Starts Today
Ready to position yourself for success in 2026? Let's have a conversation about your specific goals and how these housing market trends impact your situation. Together, we can create a personalized plan that puts you ahead of the curve—whether you're buying your first home, upgrading, downsizing, or investing in real estate.
📞 Contact Tyler Brown today to discuss your 2026 real estate strategy. Let's turn market knowledge into your competitive advantage.
🎥 For a deeper dive into this week's market data, watch the full analysis here!
