The housing market is off to a slow start in 2026, and new economic data helps explain why. From home sales to job reports, several factors are affecting mortgage rates and buyer activity.
Existing-home sales fell 8.4% in January and were down 4.4% from last year. High mortgage rates, job uncertainty, and worries about the economy are the main reasons many buyers are holding off on purchasing a home.
A recent job report showed steady hiring and lower unemployment, but 2025 had the weakest job growth since the pandemic. Concerns about job stability—including the impact of artificial intelligence (AI) in the workplace—are making some buyers more cautious about taking on a mortgage.
Foreclosures have risen for 11 months in a row, up 32% from last year. At the same time, more homeowners are falling behind on payments, called delinquencies, though most are still keeping up with their mortgages. These trends show that some families are feeling financial pressure, even if the overall market is stable.
The Federal Reserve doesn’t set mortgage rates directly, but its decisions influence them. Experts expect the Fed to stay cautious in the months ahead.
Housing affordability has improved for seven months in a row, meaning the average family has a better chance of qualifying for a mortgage. Experts also predict that home prices could soften if economic uncertainty continues, creating opportunities for prepared buyers—even in a slower market.
If you’re thinking about buying, selling, or refinancing and want to understand your options, give us a call at Bluefire Mortgage Group: (760) 930-0569. We’re here to help you navigate the market with confidence.
