The U.S. housing market is entering spring 2026 in a state of cautious transition. Mortgage rates are continuing to fluctuate, affordability is improving for the eighth straight month, and buyers are finding more options than they have in years — but economic uncertainty, job losses, and geopolitical tensions are keeping many households on the sidelines. Here's everything you need to know about where the housing market stands right now.
The economic backdrop heading into spring 2026 is mixed — but not without reason for optimism. Job losses and consumer uncertainty are real, but affordability is quietly improving, and mortgage rates are trending in the right direction.
👉 The Takeaway: Despite short-term volatility, the overall direction of mortgage rates is improving. If you've been waiting on the sidelines, now is a good time to connect with your Home Loan Specialist and start planning.
The Fed held its benchmark rate steady at 3.5%–3.75% at its March 18 meeting, taking a patient approach as inflation continues to ease.
The U.S. housing market is still tight — but buyers are gaining ground. Affordability is improving, first-time buyer activity is climbing, and wages are finally growing faster than home prices.
The U.S. housing shortage has surpassed 4 million homes, extending a supply gap that's been building for more than a decade.
New homes made up nearly 15% of all homes sold last year, the highest share since 2005.
First-time buyers made up 34% of February home purchases — the highest share since last spring.
Affordability improved for the eighth straight month, reaching its highest level since March 2022.
Wage growth is now outpacing home price growth by nearly 4%.
Nearly 19% of Redfin users searched for homes outside their current metro in late 2025, up from 16% five years ago.
In Q4 2025, 87 of the 100 largest metros were driven primarily by out-of-market buyers, not local shoppers.
Just 12% of active listings nationwide are priced above $1 million, highlighting how concentrated true luxury inventory remains.
The 2025 Cost vs. Value Report shows a wood deck now delivers a 95% return on investment — one of the highest-value home upgrades in 2026.
👉 The Takeaway: Buyers are more mobile and more motivated than the headlines suggest. Pent-up demand is real, and as affordability slowly improves, expect more activity — especially in markets where prices haven't run away.
Policy, insurance, and construction costs are reshaping what it means to buy and build a home in 2026.
👉 The Takeaway: Between rate relief on the horizon, new policy moves, and rising construction costs, the factors shaping this market are bigger than just supply and demand. Staying informed (and working with the right people) matters more than ever.
Hattiesburg, MS is one of the hottest housing markets in the country right now, with home prices up 10% year-over-year.
While major metros grab most of the headlines, some of the strongest price growth in the country is happening in smaller, more affordable cities. Here are the top 10 hottest markets heading into spring 2026, ranked by year-over-year price growth:
What’s Happening Across the Country
While national trends are shifting toward balance, local markets continue to move at their own pace. Here’s a concise look at what stands out by region.
The South continues to attract buyers from across the country, more than anywhere else in the U.S.
In Q4 2025, 64.6% of home search traffic in Southern metros came from out-of-market buyers, the highest share of any U.S. region.
Charleston, South Carolina saw 75.8% of home search traffic come from outside the metro.
Arrington, College Grove, and Walden saw the fastest home price growth in Tennessee, with values rising $47K, $45K, and $35K respectively over the past year.
In New Orleans, renewed interest in the Four Seasons luxury condos brought nearly $5 million in local buyer contracts over two weeks, suggesting high-end demand is picking back up heading into 2026.
The Northeast remains one of the most competitive and supply-constrained markets in the country — making it tough for buyers but strong for sellers and home values.
62% of demand in Northeast metros now comes from outside the area, compared to being primarily local buyer-driven in 2019.
New Jersey home prices are up 5.6% year-over-year and Connecticut is up 5.26%, defying the broader national cooling trend.
Maryland's median sale price is $448,500, up 4.2% year-over-year, with homes selling in just 28 days and about 42% going above list price.
Philadelphia home listings with HOA fees have grown to 29% of all listings, with the median monthly fee rising to about $215 — an added cost burden for buyers already navigating a tight market.
The Midwest is the strongest-performing region in the country and is quickly becoming a top destination for buyers priced out of coastal markets.
In Midwestern cities like Dubuque, Iowa and Wausau, Wisconsin, nearly 80% of millennials own homes, thanks to median prices well under $400,000 and strong entry-level inventory.
Omaha's out-of-metro demand rose from 36% in 2019 to 59.7% in 2025, one of the largest shifts nationally.
Michigan set a new goal of 115,000 more housing units after adding 87,000 ahead of schedule.
Downtown Oklahoma City may gain 200+ new apartments as developers convert historic office buildings into housing, part of a growing office-to-residential trend nationally.
Texas is recalibrating after years of outsized growth, but opportunity still exists across the state's major metros.
After years of pandemic-driven price surges, the Southwest is cooling into a more balanced market giving buyers more breathing room than they've had in years.
New Mexico's median sale price is $373,200, up 1.1% year-over-year, with 6 months of supply putting the state right at the balanced market benchmark. Albuquerque is leading the state with 6.1% price growth.
Nevada lawmakers are pushing to ban institutional investors from buying single-family homes, but experts warn it could actually reduce supply. Home price growth in Reno-Sparks has already cooled from 22% annually during the pandemic to just 3.8%.
Paradise Valley, Arizona entered the top 10 most expensive zip codes in the U.S. with a $5.5 million median list price and homes averaging nearly 5,800 square feet.
Lower mortgage rates are starting to bring buyers back to the Pacific Northwest, but affordability remains a real barrier — especially in higher-priced markets like Seattle, Portland, and Bend.
Washington state's median home price sits at $625,300 as of February 2026, with homes averaging 50 days on market and inventory up 14.3% year-over-year — giving buyers noticeably more options than a year ago.
Boise, Idaho approved nearly 2,000 new housing units as the city pushes denser development near downtown and transit corridors to keep up with population growth.
HOA fees are appearing in about 35% of Oregon home listings, up from 26% in 2019 — adding an increasingly important cost consideration for buyers.
A new $26 million horse racing complex in Evanston, Wyoming is sparking housing interest from Utah buyers drawn to lower home prices and Wyoming's lack of state income tax.
California’s housing story remains centered on affordability and the slow, uneven search for relief across its major metros.
Newport Coast, California now ranks as America’s most expensive ZIP code, with a median listing price of $12.5 million, up 29.3% year-over-year.
California home buying has fallen below Great Recession levels. The state recorded 24% fewer home sales over the past three years than during the 2007–2009 housing crash, even as national sales ran 13% higher over the same period.
San Diego home values average around $989,768, with homes sitting on the market 28 to 34 days. Only about 11% of local households can afford a median-priced home, but well-priced entry and mid-level homes are still moving in under 30 days.
Be sure to check back next month for our updated insights and trends to keep you informed on the latest developments. In the meantime, if you’re thinking about buying, selling, or refinancing, our Home Loan Specialists are always ready to help you make the right move.
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