Housing inventory growth has slowed from 33% year over year in mid-2025 to 10.0% today. The cooling marks the clearest end to the supply-shortage era and the beginning of a market where pricing power will be determined more by demand strength, rates and buyer behavior than scarcity alone.
As HousingWire Lead Analyst Logan Mohtashami recently noted, “Year-over-year housing inventory growth has slowed to single digits, from 33% at one point last year to 9.99%. 2026 is off and running, and we had another crazy week of housing headlines, from Trump announcing a ban on Wall Street investors buying single-family homes to directing the GSEs to buy mortgage-backed securities.”
Combined with shifting rate dynamics and accelerating policy action, 2026 is shaping up to be a year defined less by scarcity and more by normalization.
Demand-driven pricing replaces scarcity as the primary story
The edge in this market goes to professionals who can read demand in real time. Pricing is becoming more rate-sensitive, seasonal patterns are returning, and transaction volumes are thinner. That places a premium on strategy, timing and localized decision-making rather than pure access to listings.
Inventory growth slows but normalization strengthens
Inventory is up 10% year over year, but the pace of growth has decelerated sharply from the peaks of 2025. Seasonal behavior is also returning. Inventory declined between Jan. 2-9 after rising through much of 2025, suggesting a more predictable winter bottom and spring build.
“We would want the seasonal bottom to happen in February,” Mohtashami said. “More supply means less price growth and better affordability.” A February trough would restore the kind of normal listing runway that agents, lenders and builders rely on to plan spring activity.
New listings remain the bottleneck for 2026
New listings totaled 39,007 for the week ending Jan. 9, down 12.6% year over year. The slowdown represents the biggest structural constraint heading into the spring selling season.
“The goal for new listings in 2026 is not just to return to 80,000 new listings per week during the seasonal peak periods, but to grow above 80,000 in some weeks,” Mohtashami wrote. Without that acceleration, inventory expansion will be limited and transaction volume may remain below historical norms.
Pricing discovery replaces urgent bidding
The median days on market sits at 91, reflecting a more measured sales pace than the rapid turnover of earlier cycles. A total of 34.7% of homes have taken a price cut, while just 2.4% saw a price increase. Together, those signals point to a pricing environment defined by negotiation and rate sensitivity rather than urgency or bidding dynamics.
Pending sales totaled 39,841 this week, down 2.4% from the same week in 2025. Combined with lower new listings, this indicates a market operating in equilibrium at thinner throughput levels.
Rates rewire buyer calculus and unlock demand
With mortgage rates closer to 6% than 7%, buyer math, seller psychology and move-up decisions all improve. “Unlike the start of 2025, when mortgage rates eventually headed toward 7.26%, we are near 6% — with the Trump administration bent on getting housing going again,” Mohtashami said.
The difference between 6% and 7% is behavioral. It influences payment power, move-up timing, refi eligibility and investor participation. It also creates competition at certain price points without reactivating the bidding-war dynamics of 2021–2022.
How to use this data
Agents and brokerages
- Use normalized seasonality and rate-sensitive demand to time listings ahead of spring.
- Coach buyers that pricing is shifting toward negotiation rather than urgency.
Lenders and mortgage operators
- Align rate messaging around demand elasticity, not just affordability.
- Use pending sales trends to plan staffing and funnel management.
Builders and developers
- Expect more direct competition with resale as new listings recover.
- Position incentives toward buyers comparing new vs. existing stock.
Investors and portfolios
- View price reductions as standard price discovery rather than distress.
- Factor policy risk alongside rate and cap rate dynamics.
The 2026 market is defined by moderation and balance
Mohtashami noted that “2026 will be the first year in many years with close-to-normal spreads and many rate cuts already in the system.” After years of extremes — first in demand, then in supply — the market is settling into a more balanced regime where transaction decisions hinge on timing, rates, negotiation and localized dynamics rather than scarcity.
All data represents single-family homes nationally. Weekly data represents Friday snapshots as of Jan. 9, 2026. HousingWire used HW Data to source this story. 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.