Key data lines to track
December can provide valuable insights into the upcoming year’s housing market trends. Reflecting on past data can help us anticipate what to expect in 2026. For example, in November 2022, we witnessed a significant crash in home sales, leading to a drastic drop in existing home sales. This sudden downturn, as illustrated in the chart below, occurred within just one year.
Following a period of positive data fueled by declining mortgage rates, we observed a surge in home purchases. Looking ahead to 2026, tracking key data lines in December can offer insights into the market’s trajectory. Here are the essential metrics to focus on:
Mortgage rates and the 10-year yield
Forecasting mortgage rates to range between 5.75% and 7.25%, and the 10-year yield fluctuating between 3.80% and 4.70%, recent trends suggest a favorable outlook. With mortgage rates currently near historic lows, influenced by softer labor data and rate cuts, the housing market is poised for stability in 2026.
Monitoring the upcoming December Fed meeting is crucial, as Fed Chair Jerome Powell’s remarks could impact mortgage rates. While expectations of another rate cut loom, maintaining a close watch on the 10-year yield is essential for predicting market trends in 2026.
Mortgage spreads
Improved mortgage spreads have played a pivotal role in maintaining favorable mortgage rates. As spreads return to normal levels, the housing sector is poised for growth in 2026. Tracking this data line regularly can provide valuable insights into market stability.
Mortgage purchase application data
Positive trends in mortgage purchase application data indicate a promising outlook for the housing market. With consistent growth in weekly and year-over-year data, the market is showing signs of resilience. Continued focus on purchase application trends can help gauge market performance in 2026.
Housing inventory
The housing market is transitioning to a phase of balanced inventory levels, offering buyers more options. As inventory stabilizes, home price growth is expected to slow down, creating a more favorable environment for buyers. Monitoring inventory trends throughout December can provide insights into market dynamics.
Conclusion
As we approach the end of the year, staying informed about forward-looking housing data is essential. By monitoring key indicators such as mortgage rates, purchase applications, and inventory levels, we can anticipate market trends in 2026. With a focus on data-driven insights, we can navigate the housing market with confidence and clarity.