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Buyer Demand Thaws as Affordability, Inventory Improve

  • Mortgage Returns
  • 1 hour ago
  • 1 min read

Market Perspective: Fast Facts About the Housing Market. Early 2026 data shows that homebuying demand is slowly warming ahead of the spring market, but buyers remain cautious. Buyer activity cooled sharply last December, with sellers outnumbering buyers by a record 47%. Rate relief is nudging shoppers back. 30-year fixed rate remained steady in the low 6%-range in January.
Purchase applications have been trending above last year's levels. Week ending Jan 16, 2026: +18%. Week ending Jan 23, 2026: +18%. Week ending Jan 30*, 2026: +4%. *Change likely reflects disruption from Winter Storm Fern.
Inventory is rising, though the pace has slowed in recent months. Active inventory rose 10% YoY in January, marking the 27th straight month of gains.
Buyer Reality and Seller Expectations Are Mismatched. Buyers are more selective, knowing they have greater leverage. Seller concessions are increasingly common. These include mortgage rate buydowns, closing costs, and repair credits. Nearly two-thirds of homebuyers paid below list price in 2025. Average discount of 7.9% - the largest since 2012. Yet many sellers are still pricing too high or expecting premium offers. The result: Homes are sitting on the market longer: 64 days. Some sellers are pulling their listings if they can't get asking price. Bottom line: Buyers have leverage. Sellers may need to price more competitively to meet buyers where they are this spring.


Sources:

  1. Redfin, “Home Sellers Outnumber Buyers By a Record Margin, Upping Buyers’ Bargaining Power,” January 20, 2026.
  2. Freddie Mac, Primary Mortgage Market Survey, week ending January 29, 2026.
  3. Mortgage Bankers Association (MBA), Weekly Mortgage Applications Survey, weeks ending January 16, 23, and 30, 2026.
  4. Realtor.com, January 2026 Monthly Housing Market Trends Report.
  5. Redfin, “Redfin Reports Homebuyers Are Scoring the Biggest Discounts in 13 Years,” February 2, 2026.
  6. Redfin, “2026 Housing Market Mood: Buyers Are Cautious, Sellers Are Showing Up, and Agents See Signs of Busier Spring Ahead,” February 5, 2026.

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