Everyday Economics: Housing takes center stage as we ring in the new year

By Orphe Divounguy
The Center Square

As we step into a new year, housing data takes center stage. After the Christmas holiday, markets are shifting from reflection to recalibration – and this week’s housing releases will help set the tone for 2026.

On the official calendar, we’ll get updates from the National Association of Realtors on pending home sales, alongside the latest Case-Shiller Home Price Index. These reports provide valuable signals, but they also arrive with a lag. Fortunately, the housing market doesn’t require guesswork heading into the new year.

For a more timely view of where housing demand and prices are headed, look no further than the Zillow Housing Market Report, released nearly two weeks ahead of the traditional data. It offers an early read on trends that will shape the official releases — and the broader housing outlook for 2026.

Seasonality Finally Returns

November marked an important turning point. After an unseasonably active fall, seasonal cooling finally began to seep back into the housing market.

Newly pending home sales, which had remained unusually firm through October, softened as colder weather and holiday timing weighed on activity. Even so, pending sales remained above their year-ago levels — a sign that underlying demand is still present, even if affordability and rate sensitivity continue to restrain momentum.

That balance – softer month-to-month activity, but improved year-over-year comparisons – is becoming a defining feature of today’s housing market.

Home Prices: Flat on the Surface, Mixed Underneath

On the price side, national home values were essentially unchanged from a year ago in November. That headline stability, however, masks meaningful dispersion beneath the surface.

At the property level, most homeowners are still sitting on gains relative to their last purchase. But over the past year alone, 53% of homes saw their estimated value decline. In other words, price growth hasn’t collapsed – but it has become far more uneven.

This reflects a market adjusting to higher borrowing costs, increased inventory in some regions, and buyers who are no longer willing to chase prices higher. Sellers retain leverage in supply-constrained pockets, while more competitive markets are seeing modest price givebacks.

What This Means for 2026

So where are home values and sales headed in 2026?

The short answer: roughly flat, with modest upside.

Zillow forecasts home values to rise about 1.7% next year – a far cry from the pandemic boom, but firmly in positive territory. Existing home sales are expected to show a more noticeable improvement, rising 5.2% as affordability slowly improves and sellers continue to work their way back into the market.

This isn’t a return to rapid appreciation or runaway activity. Instead, it’s a transition toward a healthier, more sustainable housing market – one defined by price stability, gradual demand recovery, and fewer extremes on both sides.

As we head into 2026, housing is no longer frozen – but it’s also not overheating. And that balance may be exactly what the market needs.