Weekly home inventory data
Housing inventory is expected to hit a seasonal low sometime in early 2026, hopefully sooner rather than later. We don’t want what happened in 2023, when the seasonal bottom was reached in April. We wish the seasonal bottom would occur in February: more supply means less price growth and better affordability.
However, since mid-June, inventory growth has slowed significantly and mortgage rates are at a three-year low. When mortgage interest rates fall below 6.64% and move towards 6%, demand for housing improves. In 2026, we should see lower rates for a longer period of time than previous years, which could keep inventory growth in check in 2026.
- Weekly Inventory Change: (January 3 – January 10): Inventory has decreased from 720,102 Unpleasant 686,784
- Same week last year: (January 4 – January 11): Stock has fallen from 635,384 Unpleasant 624,375
New advertising data
The goal for new listings in 2026 is not only to return to 80,000 new listings per week during seasonal peaks, but to grow above 80,000 in a few weeks. Last year I was happy that we hit 80,000, which is the lowest level of normal new listings as we are typically in the 80,000 to 100,000 range, but once we hit that level we didn’t see much growth.
To give you another perspective, during the years of the housing bubble crash, the number of new homes rose between 250,000 and 400,000 per week for years. Here is the new advertising data from the past two years:
- 2026: 39,007
- 2025: 44,639
Price reduction percentage
In an average year, about a third of homes experience price reductions, which underlines the dynamic nature of the housing market. Many homeowners are adjusting their sales prices as inventory levels rise and mortgage rates remain high. For 2026, let’s see how the supply/demand balance works when mortgage rates are close to 6%, not 7% ​​or higher, as the market has faced at various points over the 2022-2025 period.
For 2026, HousingWire projects a decline in nominal house prices of -0.62% nationally, based on another year of inventory growth similar to last year. And if labor data improves, interest rates could rise toward the upper end of my forecast. However, if inventory growth slows and rates remain at 6.25% or lower, that forecast is most likely incorrect as prices have continued to rise robustly in recent years while rates are near 6% and inventory growth is limited.
The only major difference this year from previous years is that the story of stock shortages is over, meaning supply will not be the main driver of prices. The demand side should play a bigger role in the story in 2026 if prices are to continue rising. Here is the past week’s price reduction percentage over the past few years:
Mortgage interest and the 10-year interest rate
In the HousingWire 2026 forecast I expect the following margins:
- Mortgage interest between 5.75%-6.75%
- The 10-year interest rate fluctuates between 3.80% and 4.60%
HousingWire’s 2026 forecast does not include a 7-handle, as employment figures have deteriorated in 2025 and mortgage spreads are close to normal. With a lot of rate cuts in the system, the way to go is to get back to the 4.40%-4.60% range on the 10-year yield as labor data starts to improve – in other words, higher job growth rates, a lower unemployment rate and picking up wage growth as the Fed tries to sound aggressive. Of course, a lot will change with a new Fed chairman and possible new Fed governors.
Last week was jobs week, but not much happened with the 10-year yield as it has been in a narrow channel for months. As you can see in the chart below, the price is trying to get above 4.20%, but without success. The only Mortgage rates briefly fell to 5.99% on Friday, solely due to a historic day in mortgage spreads. They later abandoned that move, but rates ended the week at 6.06%.
Mortgage spreads
Last week was very wild; Mortgage spreads returned nearly to their normal historical range on Friday after President Trump announced Thursday that he wants to buy another $200 billion in mortgage-backed securities. This caused wild 24-hour trading in these securities, resulting in an abnormally high drop in spreads on Friday.
Mortgage spreads were the unsung hero for housing in 2025, and 2026 looks set to be another year of positive spreads. Historically, normal spreads have been between 1.60% and 1.80%. In 2023 they amounted to no less than 3.11%. But since then, as the Fed said it was done raising rates, spreads have improved, as they typically do at this stage of the cycle.
We’ll be watching this positive story every day for 2026, because if spreads were as bad as they are in 2023, interest rates today would be well over 7%, not near 6%. If spreads improve to less than 1.60% – which wasn’t on my radar this year – that will be nothing but a positive story for the housing market this year.
Mortgage purchase application details
True to my belief that the weekly home data during the last two weeks of the year and the first week of the new year should be taken with a grain of salt, I’m going to wait another week before we start tracking the traditional purchase application data. This period is simply too heavily influenced by the holidays. Last week we saw 10% year-over-year growth, but we should be skeptical about that number. The year-over-year comps will be much tougher in 2026 as last year’s extremely low bar is over.
Total weekly pending home sales
The same year-end seasonal factors apply to our weekly and total weekly pending home sales. We’re showing year-over-year growth here, and the tracker will be firing on all cylinders next week with our weekly demand data.
- 2026: 256,837
- 2025: 252,259
Coming week: headlines, plus new home sales, retail sales and Fed speeches
There has been a lot of news in 2026 so far, and some of it has already had an impact on housing; expect more to follow. We have a lot of data this week, including new home sales, retail sales and PPI inflation, plus speeches from the Fed.
With mortgage spreads near normal, it will be critical each week to see how the 10-year yield and bond markets react to economic data, but 2026 will be the first year in many years with near-normal spreads and with many rate cuts already in the system.
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