That seemed fast! January 2026 came and went like a whirlwind.

 

For many in our markets, unprecedented cold weather was the name of the game in January. As we dealt with this arctic surge, I couldn’t help but noticed something else changed besides the temperature. Somewhere along the way in news reporting, “emergency shelter” quietly gave way to the new phraseology, “warming station”. I’m not sure when the change happened. I probably missed the official announcement, but during January’s snow and ice apocalypse I kept hearing this change repeated. “Warming station now open”, “Seek shelter at a warming station for safety”.

 

Warming station?

 

Whatever happened to just calling it a “shelter”? At some point someone apparently decided “emergency shelter” was too confusing — like folks were wandering in with sleeping bags asking, “Is this life-saving refuge or extreme camping?” Now it’s a “warming station,” which sounds less like protection from a life-threatening winter storm and more like a place where you plug yourself in for a quick seasonal recharge . . . or grab a cup of cocoa next to the gift shop.

 

It’s funny how even winter storms now come with a name change or marketing refresh. Maybe this is somewhat like the change or refresh currently taking place in the mortgage and real estate markets as we close out the first month of January 2026. Things are certainly changing in this market from a year ago, and regardless of how you feel about the new “warming station” moniker, this is a welcome change to see.

Here’s hoping February brings fewer warming stations, less ice and snow storms, and a mortgage and real estate market that continues to evolve in favor of better outcomes for all.

 

Mortgage Rates: Getting More Affordable

 

Did January set the tone for rates in 2026?

  • – The 30-year fixed mortgage rate stayed just above 6% for much of the month — a level not seen in over three years — with averages around 6.10% at the end of January.
    – At its late January meeting, the Federal Reserve voted to keep the federal funds rate unchanged. Although the Fed doesn’t directly set mortgage rates, its policy decisions influence financial markets — especially Treasury yields and mortgage-backed securities (MBS) — which in turn help determine mortgage rate pricing.
    – Daily rate volatility was present during January with some minor upticks later in the month, but rates remained attractive compared to recent years.
    – Lower rates helped ease buyer costs: typical monthly mortgage payments dropped to about $1,733 (on a typical home with 20% down), roughly 8.4% lower year-over-year.
    – Mortgage rates are likely to remain in a relatively narrow range unless new economic data or inflation concerns shift Fed expectations.
    – Despite late-month volatility and holiday/seasonal effects, refinance demand finished January significantly higher than in January 2025, with many homeowners taking advantage of more favorable borrowing costs. According to the MBA’s Mortgage Refinance Index data, refinance activity levels ended the month far above where they were a year earlier — reflecting renewed borrower interest as rates eased.

Bottom line: While rates aren’t at historic lows, January’s rate trend helped improve affordability and stoked buyer confidence heading into the important spring market while refinance activity continued to move higher.

 

Housing Market Highlights

Home Prices & Inventory

 

  • – U.S. home values continued to cool: Zillow’s Home Value Index posted its sixth consecutive month of decline in January, although values were still slightly higher year-over-year.
    – Inventory levels moved higher compared to one year ago — a positive sign for buyers — though still lower in typical supply terms than a balanced market.
    – HousingWire reported that nationally the median list price slipped to $419,900 while total inventory rose 9.6% to nearly 698,000 homes.
    Listings sat longer on the market, with homes generally taking more time to sell than a year ago.

Home Sales Activity

 

  • – Preliminary data pointed to a seasonal slowdown in closed sales typical for January, but pending listings were growing year-over-year, hinting at stronger spring demand ahead.
    – Recent weekly trackers showed pending home sales climbing steadily throughout January — a sign that buyers are returning as rates stabilize.

Buyer Market Shifts

 

  • – More homes for sale and slower sales velocity shifted some power back toward buyers compared to the frenzy seen in prior years.
    – The national median list price dipped modestly year-over-year, reinforcing the narrative of easing price pressure.

What the Data Means

For Buyers:

  • – Continued improvements in affordability as mortgage rates remain lower than recent peaks.
    – More homes on the market than a year ago and softer pricing can provide negotiating leverage for home buyers.
    – Homes are taking longer to sell — suggesting less competition than in previous seasons.
    – Should talk to their lender early and be ready to act quickly when the perfect home is found.

For Sellers:

  • – While demand isn’t disappearing, price growth is slowing and buyers are more discerning.
    – Strategic pricing, home staging, and timing will be key as the market transitions toward a more balanced dynamic.
    – Pending home sales are falling apart at a record pace. In the last month of 2025, December contracts canceled in record numbers as higher costs and increased inventory gave buyers leverage to walk away before closing.

Looking Ahead: Spring Market Signals

Economists and data models suggest the activity in January may be the calm before a stronger spring market. Spring often brings increased buyer interest, so January’s trends could set the stage for a more active market as the weather warms.

 

  • – Pending sales climbing and easing rate pressures point to more transactions later in the 1st Quarter of 2026.
    – Inventory growth, while still subdued, may set the stage for healthier market balance.
    – Forecasts for 2026 emphasize gradual improvement in affordability and overall sales dynamics.

Stay warm and remember there are only 43 days until spring.