In the past 48 hours, the US housing industry is showing early signs of recovery as affordability improves and more consumers re-enter the market. According to the latest Cotality Home Price Insights, home prices nationwide are beginning to sag, with inventory now at its highest level since 2019. After nearly a year of slowdown, home price growth in October ticked up to just under one percent, well below the typical rate seen in average years. Mortgage rates have fallen in recent weeks, prompting a surge in refinancing activity—twice the volume of last year at this time—and attracting more buyers back to the market. Improved affordability in September reached the best levels in two and a half years.
Market supply is also expanding. Data from Realtor.com reveal that housing inventory is rebounding and approaching levels last seen six years ago. The “lock-in effect,” where homeowners stayed put to avoid losing low mortgage rates, has begun to ease as rates drop, and life events push more people to list their homes. As a result, buyers have more choices and the market is moving toward better balance.
Demand is up as well. The Mortgage Bankers Association reports purchase applications are rising compared to a year ago, and weekly housing demand has increased by double digits over 2024. However, activity remains moderate compared to the boom periods of the past few years. Economists from the Mortgage Bankers Association and National Association of Realtors (NAR) forecast a double-digit rebound in home sales in 2026, provided that mortgage rates continue to ease and the labor market remains stable.
Leaders in the housing industry are focusing on creating more flexible mortgage products and targeting previously sidelined first-time buyers. No major new regulatory changes have been enacted in the past week, but industry attention is on how anticipated rate adjustments and inventory gains will affect the upcoming winter and spring seasons. Compared to reporting earlier in 2025, current conditions reflect a more optimistic outlook with restrained but tangible momentum across both supply and demand, marking a clear departure from the stagnation seen earlier this year.
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