Housing market momentum builds as early-year indicators align

Early 2026 housing data is beginning to show a clearer shift in market momentum, with multiple indicators moving in the same direction. HousingWire’s latest Housing Market Tracker data points to improving demand, steadier pricing dynamics and inventory growth that supports a more functional housing market.

As outlined in HousingWire’s weekly Housing Market Tracker by Logan Mohtashami, housing demand has historically strengthened as mortgage rates approach 6%. Early-year data suggests that relationship may be emerging again.

Pending sales show January demand building

Weekly pending home sales reached 56,252 for the week ending Jan. 23, posting gains both week over week and year over year. The January weekly totals highlight the consistency of recent gains across successive weeks:

• Jan. 2: 30,538
• Jan. 9: 39,841
• Jan. 16: 50,096
• Jan. 23: 56,252

“My work over the years indicates that housing demand strengthens when rates approach 6%, though we have not seen a sustained period at this level recently. 2026 may be the first year this trend holds,” said Logan Mohtashami, lead analyst for HousingWire.

The steady climb points to improving buyer engagement beyond a single-week seasonal rebound, even as short-term readings are influenced by holidays. Pending sales typically translate into existing home sales data about 30 to 60 days later.

Purchase applications reinforce the demand signal

Mortgage purchase application data also posted another positive week. Applications rose 5% week over week and were up 18% year over year.

With the unusually low year-over-year comparison base from early 2025 no longer in play, double-digit annual growth carries greater significance. Purchase applications generally lead closed sales by about 30 to 90 days, making them a key near-term indicator as 2026 progresses.

Inventory continues to rise, though growth is moderating

Total active inventory reached 697,868 listings, up from 695,628 the prior week. During the same week last year, inventory rose from 632,076 to 635,529.

Year-over-year inventory growth has slowed from mid-2025 peaks, but listings are expanding from a far healthier baseline than in recent years. Continued growth supports market normalization and provides buyers with more choice than the historically tight conditions that constrained transaction volume from 2022 through 2024.

Based on HousingWire’s proprietary inventory and absorption data, the market is currently operating at approximately 2.6 months of supply. That level remains seller-favorable while reflecting a more balanced and functional market environment.

New listings improve as sellers return

New listings data has shown encouraging early momentum in 2026. Last week, 53,920 new listings came to market, compared with 50,946 during the same week in 2025.

A steady flow of new supply is critical to sustaining transaction volume, particularly as buyer demand improves.

Pricing remains stable amid rising activity

The median list price stood at $419,900, up slightly from $419,000 the prior week and roughly flat compared with $421,000 during the same period last year.

Price reductions accounted for 33.6% of active listings, essentially unchanged from a year ago and in line with late-January norms since 2023. Despite rising inventory, price-cut activity has not increased, pointing to stable pricing dynamics rather than weakening conditions.

Market balance remains seller-favorable, not overheated

The Market Action Index registered 35.1, indicating seller-favorable conditions while remaining closer to neutral than levels associated with overheated market cycles.

Transaction flow remains active. Absorbed properties totaled 70,575 last week, while new listings reached 53,920. That relationship suggests inventory is being processed efficiently rather than building up or tightening further.

What to watch next

Mortgage rates remain the key variable. In the latest Housing Market Tracker, Mohtashami notes that improved mortgage spreads have helped keep rates steadier than they otherwise might be, even amid bond market volatility.

If mortgage rates can remain near current levels, demand indicators such as purchase applications and pending sales will be closely watched for confirmation that early 2026 momentum can extend into the spring.

HousingWire used HW Data to source this story. Data is through Jan. 23, 2026. To see what’s happening in your own local market, generate housing market reports. For enterprise clients looking to license the same market data at a larger scale, visit HW Data.