Is the Housing Market Finally Catching Its Breath?

If you've been waiting for a dramatic headline like "The housing market is officially back!", I'm afraid it's much less exciting than that.

The real estate market continues doing what it's been doing for a while now: slowly inching its way toward something that resembles normal.

A dear friend and a wonderful agent, Sabina Sangha of Compass, sends out a newsletter I always look forward to reading, and her latest edition had some genuinely good news for anyone house-hunting right now. Her National Market Update was rather optimistic and

does a great job of cutting through the noise. I got her okay to share some of her notes here, so if you're the kind of buyer who doesn't feel like decoding a dozen articles and graphs over your morning coffee, this one's for you.

1. Buyers Are Slowly Coming Back

The biggest takeaway? Buyers haven't disappeared, they're slowly coming back.

Year to date, pending home sales are 4.2% higher than they were at this time last year, meaning more people are signing contracts than in 2025. It's not exactly a stampede, but after such a sluggish pace, any consistent improvement is welcome.

Mortgage rates are hovering near this year's highs, but they're still a little lower than they were last summer. Add in a wealth effect from stock markets sitting near all-time highs, and a few more buyers are finding their way into the market. Sometimes "slightly less painful" is enough to get buyers off the fence.

2. The Economy Is Looking... Less Scary

A few months ago, it felt like every economic headline came with a side of anxiety. Now things are looking a bit more balanced. "Is the Strait open or closed this week?" was, sadly,

hard to keep track of, and we've felt the ripple effect of that.The good news: oil prices have eased back down and the tariff war is calming too.

The AI buildout is still putting some pressure on inflation, but there's a real chance the worst of the recent inflation surge is behind us (fingers and toes crossed), and that's welcome news for interest rates and consumer spending. Meanwhile, the labor market is

finally showing signs of improvement after a weak 2025. More hiring generally means more people relocating for work, and more relocations usually mean more homes changing hands. It's not time to celebrate just yet, but the mood has definitely shifted from "brace for impact" to "let's see where this goes."

Still, the number of homes actually selling each year remains low, only about 4.2 million nationally, according to the National Association of Realtors (NAR). A big reason for that: many homeowners bought or refinanced when mortgage rates were near 3%, and now that rates are closer to 6.5%, they're reluctant to sell and take on a much more expensive mortgage elsewhere. So they're staying put longer than they normally would.

Sabina's update looked at how quickly that might change, since eventually life circumstances like job moves, growing families or downsizing will push more of these owners to sell anyway, gradually loosening up the market..

3. Prices Are Basically Standing Still

Nationally, home prices are behaving surprisingly well.

• Sale prices are about 1% higher than last year.
• Asking prices are roughly 3% lower than last year.
• Price per square foot has softened slightly, reflecting a market that's becoming more balanced rather than one that's falling apart.

4. Inventory Has Finally Stopped Growing

One of the biggest changes this year is inventory. After several years of steadily increasing listings, the number of homes on the market has essentially leveled off. There are still fewer homes available than there were before the pandemic, but we're no longer seeing inventory flood the market month after month.

That helps explain why prices have remained relatively stable despite higher mortgage rates.

5. New Construction Is Having a Tougher Time

While the resale market is showing gradual improvement, builders are having a harder time. New home sales remain weak, and the supply of newly built homes has climbed to more than 10 months at the current sales pace, the highest it's been since July 2022. That's a very different picture from the existing-home market.

6. One Bright Spot: Homeowners Aren't in Trouble

One chart stood out more than the others. Mortgage delinquency rates remain incredibly low, especially compared to credit cards and auto loans, where late payments continue to rise. That matters because it means most homeowners aren't being forced to sell. Unlike previous downturns, today's market isn't being driven by distressed inventory.

7. You've Got a Little More Room to Breathe

If you're buying, this is good news: you don't need to rush. Homes are still taking longer to sell than they did during the frenzy of the pandemic years, though they're moving faster than they were just a few months ago. That means buyers have more room to take their time, compare options and actually negotiate, something that felt nearly impossible a few years back. That isn't necessarily bad, it simply feels a bit more like a balanced market.

So... What's the Bottom Line?

The housing market isn't booming. It isn't collapsing either. Buyer activity is picking up,

inventory has stabilized and prices are steady. Real estate is still super-local though, so conditions can vary from one neighborhood to the next.

A big thank you to Sabina for sharing her National Market Update. I've included her information below, as well as the graphs because colorful charts somehow make it all feel a little less intimidating.

Sabina Sangha

Licensed Real Estate Sales Agent

The Family Office, NY

M: 917.843.2405

E: Sabina@compass.com