Each week, I analyze the evolving dynamics of the market, identifying emerging trends, shifts in momentum, and key considerations for real estate professionals. Last week, the Federal Reserve left the federal funds interest rate unchanged after three cuts in late 2025, with Chair Jerome Powell noting that the economy entered 2026 on firm footing. Data from ATTOM indicates that last year’s median home sale price rose 2.6% year-over-year to a new national record. Plus, according to Cotality, easing mortgage rates may support an uptick in home buying activity, but constrained inventory and rising non-mortgage expenses are likely to keep competition uneven and market conditions highly dependent on local dynamics.
February 2, 2026
FED HOLDS RATES. The Federal Reserve paused its easing cycle at the January meeting, keeping the federal funds rate at 3.75% and signaling confidence in an economy that continues to expand at a solid pace with low job gains, a stabilizing unemployment rate, and inflation that remains somewhat elevated. The statement suggested a more balanced view of risks to both employment and price stability compared with December. The National Association of Home Builders continues to expect two additional rate cuts in 2026 as inflation eases and the labor market cools. While changes to the federal funds rate do not directly move mortgage rates, they do lower financing costs for builders and developers, supporting efforts to expand housing supply and improve affordability. Full story from EYEONHOUSING →
- Why this Matters: The Fed’s decision to pause its easing cycle offers an important signal about the health and direction of the economy. By holding rates steady and describing conditions as solid, the Fed is indicating that inflation and the labor market are moving toward a more stable balance. This shapes expectations for future policy, influences financial markets, and affects the cost of borrowing for businesses and builders, which can support more housing supply at a time when affordability remains a major challenge.
HOME PRICES ROSE TO RECORD HIGHS IN 2025 AS AFFORDABILITY CHALLENGE LOOM. ATTOM’s Year End 2025 U.S. Home Sales Report shows that the national median price reached a record-high $360,000, while seller profits and returns continued to shrink from their 2022 peak — signaling a gradually normalizing market. Most metros saw prices rise, with the strongest gains in parts of the Midwest and Northeast. Ownership tenures reached new highs, cash purchases climbed to their highest share since 2013, foreclosure-related sales edged slightly lower, and wide regional differences in profits and pricing underscored the uneven nature of the market’s transition. Full story from ATTOM→
- Why this Matters: The housing market is shifting beneath the surface even as prices continue to rise. Record-high sale prices create the impression of broad strength, but shrinking profit margins, longer ownership tenures, and rising cash purchases point to a market that remains complex for both buyers and sellers. These trends help explain where demand is strongest, where pressure is building, and how affordability constraints are shaping behavior across regions. Understanding these signals gives industry professionals a clearer view of how the market is evolving and where opportunities or risks may emerge next.
10 THINGS TO KNOW ABOUT THE HOUSING MARKET IN JANUARY. Cotality’s latest look at the market shows a housing landscape entering 2026 with slower national price growth, widening regional differences, and persistent affordability pressures as rising taxes, insurance, and reconstruction costs weigh heavily on households. Markets in the Northeast and Midwest are gaining strength while Florida, Texas, New York City, and Austin are experiencing sharp slowdowns marked by longer selling times and rising inventory. Nationwide, rent growth has cooled to its lowest pace in 15 years. Looking ahead, easing mortgage rates may lift demand, but limited supply and high ownership costs will keep competition uneven and market outcomes highly local. Full story from COTALITY →
- Why this Matters: Slower national appreciation, sharp regional divides, and rising non-mortgage costs shape who can participate in the market and where opportunities exist. Investor activity, cooling rents, and widening affordability gaps reveal deeper structural pressures that will influence demand, supply, and mobility throughout the year. Understanding these shifts helps industry professionals anticipate where competition will intensify, where buyers may struggle, and how local dynamics will drive outcomes in a market that is no longer moving in a single national direction.
THE BOTTOM LINE: The housing market continued to build early-year momentum this week as mortgage rates hovered near six percent, giving buyers a clearer path forward and helping demand strengthen across many markets. Overall, the market entered the final stretch of January with a healthier rhythm than last year. Lower rates are helping buyers regain purchasing power, sellers are slowly returning to the market, and early spring indicators are pointing toward a more balanced and functional market environment. The next few weeks will be critical in determining how much momentum carries into the heart of the spring selling season.
Disclaimer: this is a compilation of industry news from trade media and industry groups; it does not share any forward-looking predictions or projections.
