Housing Market Momentum Builds: Spring 2026 Outlook
After a brief slowdown caused by January’s winter storms, the housing market is showing renewed signs of life as we head into the spring selling season. Weekly pending home sales are back to year-over-year growth, a positive indicator as we navigate fluctuating economic conditions.
Pending Sales Rebound
Recent data reveals a positive trend in pending home sales. Last week, 59,283 homes went under contract, compared to 56,693 during the same week in 2025. Whereas weekly data can be volatile, this marks a return to growth after the disruptions caused by severe weather earlier in the year.
Mortgage Applications Signal Future Sales
Looking ahead, mortgage purchase application data provides a valuable leading indicator. An 8% year-over-year increase in these applications suggests continued sales momentum over the next 30-90 days. Consistent positive growth in this area – ideally for 12-14 consecutive weeks – is a strong signal of a healthy market.
Rates and Yields: A Stable Landscape
Mortgage rates currently hover around 6.04%, according to Mortgage News Daily, with a weekend rate of 6.26% reported by Polly. Despite recent economic data releases and a significant Supreme Court decision regarding tariffs, the 10-year yield has remained relatively stable. The 2026 HousingWire forecast anticipates mortgage rates between 5.75% and 6.75% and the 10-year yield between 3.80% and 4.60%.
Pro Tip: Retain a close eye on mortgage spreads. Currently near normal levels, these spreads are helping to keep mortgage rate volatility in check.
Inventory Growth Cools, Providing Balance
Housing inventory is increasing, a welcome development for buyers. While year-over-year growth has slowed from 33% to 9.38% last week, inventory levels remain at multiyear highs. This increase in supply is helping to moderate price growth.
Weekly inventory rose from 690,547 to 700,259 between February 13th and February 20th. This compares to a smaller increase – from 637,984 to 640,221 – during the same period last year.
Novel Listings Increase, Reflecting Buyer and Seller Activity
The number of new listings is also experiencing year-over-year growth, with 60,428 new listings reported last week compared to 53,861 in 2025. This suggests both buyers and sellers are becoming more active in the market.
Price Cuts Decline, Indicating Strengthening Demand
Interestingly, the percentage of homes undergoing price cuts is now 1% lower than this time last year. This suggests that demand is picking up slightly and inventory growth is moderating, giving sellers more confidence in their asking prices.
Looking Ahead: Key Economic Data and Potential Disruptions
The coming week will be crucial, with several key economic reports scheduled for release. Fed speeches, the PPI inflation report, and home price index reports will all provide valuable insights. Bond auctions and the market’s reaction to recent tariff announcements will also be closely watched. Jobless claims data remains positive.
Frequently Asked Questions
- What is a mortgage spread? Mortgage spreads represent the difference between mortgage rates and the 10-year Treasury yield. Smaller spreads generally mean lower mortgage rates.
- How do pending home sales impact the market? Pending home sales are a leading indicator of future home sales, providing a snapshot of current buyer demand.
- What is considered a normal range for mortgage spreads? Historically, mortgage spreads have ranged from 1.60% to 1.80%.
Did you know? Mortgage spreads are currently reducing mortgage-rate volatility, contributing to a more stable housing market.
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