After a challenging 2025, the U.S. residential real estate market is showing early signs of recovery as it moves into 2026. Recent data from major industry reports suggest that easing mortgage rates have sparked renewed buyer interest, leading to a noticeable increase in home sales activity and mortgage applications.

Inventory levels have also been steadily improving. National housing supply has risen for more than two consecutive years, helping relieve some pressure in previously overheated markets. However, this recovery has not been evenly distributed. The South and West are seeing the strongest gains in available inventory, while the Northeast continues to experience tighter supply conditions, limiting buyer options in those regions.

Looking ahead, experts anticipate that home price growth will likely slow or flatten in 2026. As supply and demand move closer to balance, the rapid appreciation seen in recent years is expected to ease, creating a more stable pricing environment. While affordability remains a concern for many buyers, these conditions point toward a healthier and more sustainable market overall.

Consumer behavior is evolving as well. Today’s buyers are staying in their homes longer and increasingly using digital tools—such as online listings, virtual tours, and market analytics—while still relying on real estate professionals for guidance and expertise throughout the transaction.

Overall, the U.S. housing market appears to be transitioning toward normalization. While challenges persist, particularly around affordability, the combination of improving inventory, moderating prices, and renewed buyer confidence signals a more balanced and resilient market heading into 2026.