Uptick in new listings offers hope for the chilly market
With rates near three-year lows and new listings on the rise, market conditions are relatively decent for home shoppers ahead of the spring homebuying season.
Key points:
- The 30-year fixed-rate mortgage barely changed over the past week as levels continue hovering around three-year lows.
- While winter snowstorms have slowed mortgage application activity, refinance applications are holding steady.
- New listings are starting to perk up, but the amount of time that the typical home spends on the market is still increasing.
While many Americans may have been focusing more on digging out from winter storms over the past few weeks than on buying a home, decent market conditions remain in place for when temperatures do start to climb.
Mortgage rates stabilize near 3-year lows
The 30-year fixed-rate mortgage was mostly flat this week, moving up a tick from 6.1% to 6.11%, according to Freddie Mac's weekly survey. Rates have stayed within a narrow range during the first six weeks of the year and are well below the levels recorded a year ago.
However, the recent tranquility among mortgage rates could be tested next week when the federal government releases its January jobs and inflation reports, which were delayed due to the brief government shutdown. Other related job data, such as ADP's latest report covering private sector employment in January, suggests the labor market continues to weaken in early 2026.
Weather stalls loan activity
The winter storms likely impacted mortgage applications this past week as many Americans were snowed in, according to the Mortgage Bankers Association. Overall applications were down 8.9% from the week before and purchase applications were just 4% higher than a year ago — even though 30-year rates were bouncing around 7% in early 2025.
Meanwhile, refinance applications were up 117% compared to the same period last year, an uptick that suggests more people are staying in place, according to Lisa Sturtevant, chief economist at Bright MLS.
"Instead of trading in both their rate and home for a new home, more homeowners with above-6% rates seem to be just taking the opportunity to acquire a new lower rate," Sturtevant said.
This is also supported by the latest days-on-market data. A new Redfin report estimates that the typical home that sold in January was on the market for 64 days — roughly a week longer than a year ago and the longest span in six years.
But new listings are starting to rise again ahead of the spring homebuying season. Redfin estimates that new listings rose about 1.1% compared to a year earlier, the third consecutive week of increases after a two-month slump.
A market still in recovery mode
At this stage, the housing market is slowly recovering but remains far from where a market of its size and demand should be, according to Odeta Kushi, deputy chief economist at First American.
In a recent blog post that focused on January sales activity, Kushi noted that home sales equal 3.3% of U.S. households, trailing the pre-pandemic average of 4.2%. To close the gap, more than 1 million additional annual sales would be needed.
This reflects "a market that is loosening after an extended period of constraint," Kushi said. "A more durable recovery in sales activity is likely to come gradually, as time and life events begin to outweigh financial inertia."