As we begin the new year, the housing market is entering a more stable, measured phase. With inflation slowing, mortgage rates holding steady, and the Federal Reserve signaling patience, 2026 may offer more predictability for buyers, sellers, and the agents supporting them. Here’s what to watch this month.

Economic Shifts: Slowing, But Not Stalling

The U.S. economy continues to show signs of deceleration. December’s inflation data came in at 2.7% annually, with core inflation slightly lower at 2.6%. While unemployment remains steady, job growth has cooled. These are not recession signals, but they do point to a more balanced environment, one where consumers and the housing market can breathe a little easier.

Federal Reserve: A Pause in Motion

The Fed’s benchmark rate remains at 3.75% following its most recent decision, and policymakers currently expect just two rate cuts in 2026. Markets are anticipating the first adjustment around midyear. The next Fed meeting, scheduled for January 28, may offer further clarity—but for now, the central bank appears comfortable with its wait-and-see stance.

Mortgage Rates: Consistency Returns

Mortgage rates have remained relatively unchanged in recent weeks, holding just under 6%. After years of volatility, this consistency gives buyers and sellers alike a stronger foundation for planning. While rates haven’t dropped dramatically, they’ve become more predictable, making it easier to compare options, lock a rate, and take the next step with confidence.

Buyer & Seller Impact: Opportunities with Realism

Buyers are beginning to return to the market thanks to stable rates and easing inflation, but many remain price-conscious and cautious. Flexible financing options, such as buydowns or lender-paid rate locks, are helping tip the scales. On the seller side, competitive pricing, realistic expectations, and clean listings remain essential as inventory tightens, but competition grows more nuanced.

Agent Impact: Lead with Confidence and Clarity

For real estate professionals, this is a market that rewards education and strategy. Whether helping buyers understand their financing options or guiding sellers through pricing conversations, agents have an opportunity to be the voice of clarity. Use current rate trends, Fed signals, and affordability tools to keep your clients grounded, and moving forward with confidence.