Sellers Are Accepting Even Less | Jan. 2026 Housing Market Update

What It Covers

Dave Meyer analyzes January 2026 housing market data showing 0.5% annual price growth in 2025, mortgage rates hovering around 6.2%, and inventory up only 4% year-over-year. He explains why investors remain optimistic despite flat conditions, highlighting improved negotiating power and deal flow as key opportunities for portfolio growth.

Key Questions Answered

• •Buyer Negotiation Leverage: Properties now sit on market for 60 days, the longest in over a decade, with homes selling 2% below list price on average. Investors should offer below current comparable sales, not just below asking price, to capture equity through negotiation rather than waiting for market appreciation in flat conditions.
• •Demand Recovery Signal: Mortgage purchase applications increased 10% year-over-year despite sluggish sales volume of 4.1 million homes versus the normal 5.25 million. This upward demand trajectory combined with modest inventory growth of 4% creates balanced market conditions that favor patient buyers willing to negotiate aggressively on pricing and terms.
• •Regional Performance Gaps: Detroit leads price growth at 9% while Dallas experiences the largest decline at negative 8%, followed by Oakland at negative 6% and Austin at negative 4%. The worst-performing markets concentrate in California, Florida, and Texas, creating geographic opportunities for investors targeting appreciation versus cash flow strategies.
• •Expense Management Priority: Rising operating costs rank as the top challenge for experienced investors, surpassing deal flow and capital constraints. Investors should reanalyze existing portfolio performance annually, checking if tax increases, insurance hikes, and maintenance costs have eroded initial return projections, then consider value-add renovations, ADUs, or strategic sales to optimize returns.
• •Mortgage Rate Outlook: The Trump administration's 200 billion dollar mortgage-backed security purchase program reduced rates by 25 basis points, briefly dropping the 30-year fixed rate below 6%. Expected range for 2026 remains 5.5% to 6.5% with a 6.1% average, providing modest affordability improvements when combined with flat prices and wage growth.