U.S. Housing Market Cools as 2025 Ends, With Rates Steady and a Mild 2026 in View

Analysts expect a slow 2026 recovery with mortgage rates still in the high-5% to above-6% range.

Overview

The 30-year fixed averaged 6.72% in 2025 and sits near 6.2%, delivering stability rather than a sharp drop in borrowing costs.
National price growth slowed from 3.4% in January to 1.1% by October, with roughly one-third of large metros recording year-over-year declines as single-family rent growth fell to a 15-year low.
Active listings rose year over year but total inventory remained below pre‑pandemic norms, while the Washington, D.C., region saw a 60% surge in inventory and a 36% rise in time on market after federal layoffs and a shutdown.
Homeowners tapped record housing wealth as home equity lending reached its highest level since 2008, even as serious mortgage delinquencies edged higher, led by FHA loans.
Investors spent an estimated $483 billion on nearly one million single‑family homes through October, and outlooks call for roughly 3% price gains in 2026 with persistent lock‑in and a small refinance wave centered on 2023–2025 borrowers.