Home Prices Dip as Cautious Shoppers Sit Out a Growing Buyer’s Market

The new year is starting off on slow footing in the housing market. January is typically a quiet period but now inventory is growing and the pace of sales is slowing, according to the Realtor.com® Weekly Housing Trends Report.

Shoppers haven't stepped off the sidelines and into a home, despite mortgage interest rates remaining close to 6%. This same time last year, mortgage rates were 6.95% for a 30-year fixed home loan. This week, rates registered at 6.10% for the week ending Jan. 29, according to Freddie Mac.

Realtor.com economists "project 2026 to be a buyer-friendly year, but the buyers have not yet taken notice."

Buyers may want to take advantage of homes for sale that have remained on the market—some listings for months. There are many sellers who have not removed their listings and may be willing to make a deal.

As a result, the report found that home prices have taken a dip, and affordability may be improving because of lower mortgage rates, lower home prices, and growing incomes.

Home inventory trends

The number of home listings is trending well above last year's level. This means buyers have more to choose from than the same time period in 2025.

New homes being listed are up 3.2% year over year. New listings are a measure of sellers putting their homes up for sale.

The inventory growth in both active and new listings shows a slower pace of sales, as homes take longer to find buyers. Realtor.com economists say this shift in the power dynamic of the marketplace in favor of buyers continues, as they have less competition and more homes to choose from.

Overall, homes are sitting on the market longer. Homes spent six days longer than a year ago. This is a sign of softer demand. Economists say homes are taking longer to sell as buyers weigh their options and sellers have more competition. Combined, they are contributing to a slower winter selling season. Economists say the data suggests that the showdown goes beyond normal seasonality.

The report shows that the median list price declined 2% year over year. Economists say this is the most significant drop in more than a year, suggesting home prices are starting to adjust in a "meaningful" way to the slower pace of home sales and the rise in home for sale inventory.

The median listing price per square foot also fell 2% year over year —an indication that price softness is not just due to a smaller mix of homes for sale.