Housing Activity Is Picking Up Heading Into Spring
Inside Lending For the week of JANUARY 19, 2026
QUOTE OF THE WEEK
“The trouble with being punctual is that nobody’s there to appreciate it.”—Franklin P. Jones, American journalist, PR exec, and humorist
NATIONAL MARKET UPDATE
Existing Home Sales shot up 5.1% in December, the biggest increase for that month in nearly three years, while affordability improved—wage growth has been consistently outpacing home price gains for the first time since 2023.
New Home Sales continued to show signs of life in October—up 18.7% for the year. Plus, median sales prices are down almost 15% from the October 2022 peak, and supply is up 300% from the 2022 bottom.
Freddie Mac’s Chief Economist noted that “weekly purchase applications and refinance activity have jumped,” and “it’s clear that housing activity is improving and poised for a solid spring sales season.”
REVIEW OF LAST WEEK
CHOPPY… Stock prices bounced up and down all week as traders vacillated between taking profits and buying up bargains. The three major market indexes ended modestly negative, yet still near record levels.
CPI consumer price inflation held steady in December, while PPI wholesale price inflation edged up a tick in November. Traders, though, were hoping for a downside surprise that would encourage the Fed to keep cutting rates.
Meanwhile, the economy keeps growing. Retail Sales rebounded strongly in November, and manufacturing output came in better than expected, with gains in both Industrial Production and factory Capacity Utilization.
The week ended with the Dow down 0.3%, to 49,359; the S&P 500 down 0.4%, to 6,940, and the Nasdaq down 0.7%, to 23,515.
Bond prices also slipped overall, though the 30-Year UMBS 5.0% inched UP 2 basis points, to 100.05. Freddie Mac reported the national average 30-year fixed mortgage rate fell 10 basis points “to its lowest level in more than three years.” Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… A major real estate database reports more gains in affordability. Nationwide, monthly payments on a median-priced home fell by about $118 and purchasing power gained by more than $30,000 since last summer.
THIS WEEK’S FORECAST
HOME BUILDING, PENDING HOME SALES, INFLATION, GDP… There are no forecasts for December Housing Starts and Building Permits, but September and October Construction Spending should move up a bit overall, and we’ll check the residential part. Economists forecast December Pending Home Sales will show another increase for signed contracts on existing homes. The October and November PCE Price Index is predicted to report inflation moderating, while the latest GDP read is expected to have the economy growing at a strong 4.3% clip.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. With inflation holding above the Fed’s 2% target and the labor market in low-fire, low-hire mode, Wall Street expects no rate cuts for the next three meetings. Note: In the lower chart, the 5.0% probability of change means there’s a 95.0% probability the rate will stay the same. Current rate is 3.50%-3.75%.
BUSINESS TIP OF THE WEEK
Success demands sacrifice. Create boundaries to protect your personal life, but don’t expect to achieve work-life balance all the time. There’s no getting around the fact that it takes hard work to succeed.
Thinking about buying, selling, refinancing, or simply want to understand how today’s market impacts your long-term plan?
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- How current rates and affordability affect your buying power
- Whether waiting, buying, or restructuring makes sense for you
- A clear game plan tailored to your goals for 2026 and beyond
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