We’ve already been talking about it for months.
How the market starts next year will be unlike any we’ve seen in recent history.
It’s mostly because the 2025 failure rate is higher than usual due to the surge of listings – there hasn’t been enough buyers to go around. Those failed listings will be back in early 2026 as the frustrated sellers will be edging closer to the exits, which means sooner and lower in price.
The graph above is really showing the ratio between supply and demand. I added the red dots to highlight the January action, with the 2026 estimating how the additional supply should slow down the buyers. The more homes that come on the market, the more buyers will want to wait-and-see where the market is going to go. It is irresistible for them to think it might get worse later (and better for them).
Mortgage rates aren’t going to be significantly better. The chaos will be steady and hard to shake off, though it might cause buyers to want to hurry up and buy so they can hunker down.
How they decipher the early-2026 market conditions is all that matters.
As the year rolls out, the sales should be fine – but will they happen when you want them to be, and at what price?
