More Buyers Are Entering the Market in 2026, But There’s One Catch
The housing market is starting to show signs of movement again.
According to the latest report from the National Association of REALTORS® (NAR), more buyers are going under contract, signaling renewed activity as we head into the spring season. But while demand is picking up, buyers are still moving carefully.
This mix of opportunity and caution is shaping today’s market.
Pending Home Sales Are Rising Again
NAR’s Pending Home Sales Index, which tracks signed contracts for existing homes, rose 1.8% in February compared to January. This increase suggests that more buyers are stepping back into the market after a slower period. However, on a yearly basis, activity is still slightly lower. Pending sales are down 0.8% compared to last year, showing that the market is still adjusting.
According to Lawrence Yun, Chief Economist at NAR, improved affordability is one of the key reasons buyers are returning.
“The slight gain in pending contracts appears to be driven by improved affordability conditions.”
Mortgage Rates Are Still Driving Buyer Behavior
Even with rising contract activity, one factor continues to influence buyer decisions: mortgage rates.
Rates recently dipped below 6%, the lowest level seen in more than three years, before rising again to an average of 6.11% for a 30-year fixed mortgage, according to Freddie Mac.
This kind of movement has made buyers more sensitive to timing. Small changes in rates can significantly impact monthly payments, which is why many buyers are watching the market closely before making a move. Global factors, including geopolitical tensions and rising oil prices, are also contributing to uncertainty around future mortgage rate trends.
Affordability Is Slowly Improving
There is some positive news for buyers.
Housing affordability has started to improve due to a combination of factors:
Mortgage rates are lower than they were a year ago
Wage growth is outpacing home price increases by nearly 4 percentage points
More homes are available for sale
The median existing-home price reached $398,000 in February, which is only 0.3% higher than a year ago, showing that price growth has slowed significantly.
Additionally, fewer homes are selling above asking price. In February, only 14% of homes sold above list price, compared to 21% a year ago.
This shift gives buyers more negotiating power than they’ve had in recent years.
First-Time Buyers Are Slowly Returning
Another notable trend is the gradual return of first-time homebuyers.
In February, 34% of existing-home sales came from first-time buyers, indicating that more people are entering the market after being sidelined by affordability challenges.
However, buying a home is still not a quick decision.
As Lawrence Yun explains:
“For first-time home buyers, purchasing a home is not a snap decision. It takes time to build credit, save for a down payment and fulfill existing rental lease agreements.”
Despite this, there is still a strong underlying demand. Many potential buyers are preparing to enter the market when conditions improve further.
Regional Differences Are Becoming More Noticeable
Housing activity is not the same across every part of the country.
The Midwest saw the strongest growth in February, with pending home sales increasing nearly 5% month-over-month. The South followed with a 2.7% increase, while the West saw a smaller 0.9% gain.
The Northeast, however, experienced a decline. Contract signings dropped 3.6% from January and were down 12% compared to last year.
Higher home prices and limited inventory are key factors holding back activity in that region, where the median home price reached $479,800 in February.
Buyers Are Active, But Still Careful
The current housing market is defined by a balance between opportunity and caution.
Buyers are returning as affordability improves, but they are still paying close attention to mortgage rates, pricing, and overall market conditions.
Well-priced homes are continuing to attract interest, while overpriced listings may struggle to gain traction.
Talk to Our Team About Navigating Today’s Market
If you're thinking about buying or selling, understanding how these market shifts affect your strategy is key.
Contact our team today to get expert guidance on current market conditions, pricing strategies, and opportunities in Chicago’s housing market.
We’ll help you make informed decisions in a market that continues to evolve.
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Ranked among the top 1% of real estate teams in the Chicagoland market, Cory Tanzer and the Cory Tanzer Group are experts in helping buyers and sellers navigate today’s market across Downtown Chicago, the North Shore, and the Western Suburbs. Recognized for their neighborhood expertise in areas such as University Village, University Commons, South Loop, and Pilsen, the team helps clients stay one step ahead by understanding where the Chicago market is headed next.
