The housing and mortgage markets continue to evolve as economic conditions shift. While mortgage rates have improved compared to last year, they remain elevated and somewhat volatile as inflation and new economic data continue to influence the bond markets. For many buyers, affordability is still a key concern, but there are signs that conditions are gradually improving. Here’s what we saw in the first quarter of 2026.
Mortgage Rates Are Lower Than Last Year, But Still Volatile
Mortgage rates have recently dipped closer to the 6% range, bringing some relief compared to the higher levels seen last year. While this is encouraging for buyers, rates continue to fluctuate as inflation and broader economic indicators influence financial markets. These movements can quickly affect borrowing costs, which is why many buyers are closely watching rate trends when deciding whether to enter the market.
Buyer Activity is Beginning to Pick Up
As mortgage rates edge lower, homebuyer activity has started to gradually increase. Even small rate improvements can expand purchasing power, allowing more buyers to reenter the market after sitting on the sidelines during periods of higher rates. This renewed activity suggests that many buyers are ready to move forward once affordability begins to improve.
Refinance Activity Is Also Increasing
Homeowners are responding to lower rates as well. Recent data shows refinance applications rising sharply, with some reports showing week-over-week increases of more than 14%. For many homeowners, refinancing offers the opportunity to reduce monthly payments or restructure their loan terms after last year’s higher-rate environment.
Housing Inventory is Slowly Improving
Another important shift is the gradual increase in housing inventory in some markets. While supply is still relatively limited compared to historical levels, more homes coming to market is beginning to give buyers slightly more negotiating power.
At the same time, home values have remained relatively stable in many areas, which continues to benefit homeowners who have built equity over the past several years.
What This Means for Buyers and Homeowners
Today’s housing market sits in a transitional phase. Mortgage rates remain higher than many buyers would prefer, but they are improving compared to last year. At the same time, inventory is slowly increasing, which may create more opportunities for buyers.
For both homebuyers and homeowners, staying informed about market conditions can help them make better decisions about when to buy, sell, refinance or adjust their financing strategy.
It’s an important time to have a trusted mortgage professional in your corner. The Agency’s partner, Aclara Lending Team, powered by Barrett Financial Group, LLC, is here to help. Talk to a live loan officer today at 800.520.2340 or reach out via their website.
