Key facts
- Existing home sales are positive year-over-year due to improved mortgage spreads.
- Mortgage rates have stayed below 6.64% in 2026, aiding housing demand.
- Weekly pending home sales and total pending sales show year-over-year increases.
- Housing inventory levels are healthier in 2026 compared to 2020-2023.
- New listings data for 2026 surpasses that of 2023 and 2024.
- The percentage of homes with price reductions is lower in 2026 than in 2025.
Existing home sales have maintained positive year-over-year growth, largely attributed to improved mortgage spreads that have kept rates manageable in 2026. Despite a hawkish Federal Reserve and elevated oil prices, mortgage rates have remained below 6.64%, a crucial factor for housing demand, especially when compared to previous years where rates above 7% significantly softened sales.
Historically, mortgage spreads widen during rate-cut cycles, but in 2023, they exceeded 3%, a rare occurrence. This year, however, spreads have narrowed, allowing mortgage rates to stay within a more favorable range, projected between 5.75% and 6.75% for 2026. This contrasts sharply with scenarios where 2023, 2024, or 2025 spread levels would have pushed current mortgage rates above 7%.
The 10-year Treasury yield closed last week at 4.49%, despite mixed economic data including a jobs report miss and elevated oil prices. Analysts suggest that increasingly restrictive policy may be contributing to yields hovering around the 4.46%-4.48% level. Market participants are awaiting signals from the Federal Reserve to shift away from rate hike expectations.
Weekly pending home sales data indicates continued year-over-year growth, with 71,173 sales recorded in 2026 compared to 66,967 in 2025. Total pending sales also show an increase, reaching 422,130 in 2026 from 396,652 in 2025. Purchase application data has consistently shown positive year-over-year growth throughout 2026, with 23 weeks of positive growth recorded.
Housing inventory has slowed its growth, but levels in 2026 are considered healthier than those seen from 2020 to 2023, contributing to efforts to make housing more affordable. New listings data for 2026 is also performing better than in 2023 and 2024, with improved mortgage spreads encouraging sellers. The percentage of homes experiencing price reductions has been lower in 2026 compared to the previous year.