Moving Into Spring: Market Predictions 2026

by Vicky Piper

Moving into Spring: What Falling Rates Mean for Buyers

For nearly four years, the housing market has operated under the weight of elevated interest rates. During that stretch, activity was largely driven by buyers of necessity—those relocating for work, family changes, or major life events. Buyers who had to move made moves.

Meanwhile, discretionary buyers—those who wanted to upgrade, downsize, or reposition but didn’t need to—largely stayed on the sidelines. Higher borrowing costs reduced affordability and compressed purchasing power, creating hesitation across much of the market.

Now, we’re beginning to see a shift - just in time for the Spring market (which is usually the busiest time of the year regardless.)

Rates Dip Below 6% for the First Time Since 2022

For the first time since 2022, mortgage interest rates are dipping below 6%. While that may seem incremental, psychologically and financially it represents an important threshold.

A shift from the mid-6% range into the high-5% range can significantly improve:

Monthly payment affordability
Purchasing power
Buyer confidence
Overall transaction volume

In her recent market update, Danielle Hale, Chief Economist at Realtor.com, recently stated:

“We expect that buyers will react and home sales will pick up as we move into March and April.”

This outlook aligns with what many professionals are observing: increased inquiries, more showings, and early indicators of renewed activity heading into spring.

The Return of the Discretionary Buyer

Lower rates tend to unlock a different segment of the market—the discretionary buyer. These are homeowners who:

Have equity but didn’t want to trade into a higher rate
Delayed lifestyle moves
Waited for more favorable borrowing conditions

When rates decline—even modestly—it often provides the financial and emotional catalyst this group has been waiting for.

A discretionary market typically leads to:

More listings
Greater inventory balance
Increased transaction velocity
Healthier negotiation dynamics

In other words, movement creates opportunity.

The Counterpoint: Inflation & Oil Prices Still Matter

However, it’s important to view this shift with measured perspective.

Inflation has recently come in higher than many economists expected. Under normal monetary conditions, sustained or sticky inflation would place upward pressure on interest rates, not downward. If inflation proves persistent, the Federal Reserve may maintain tighter policy longer than markets anticipate, which could stall or reverse rate declines.

Additionally, we need to keep a close eye on oil prices. Energy costs are a leading economic indicator because they directly impact:

Transportation
Manufacturing
Supply chains
Consumer goods pricing

When oil prices rise, production and distribution costs increase—affecting nearly every sector of the economy. Elevated energy costs can contribute to inflationary pressure, which in turn influences interest rate policy and mortgage pricing.

In short: while rates dipping below 6% is encouraging, macroeconomic variables remain fluid. Also, 70% of mortgage holders in the USA have rates below 5%. There will be discretionary buyers that feel like today's rates are still not low enough to make a move.

What This Means Moving Into Spring

March and April historically signal the beginning of the spring selling season. If rates stabilize or continue to ease, we may see:

Stronger buyer participation
Increased competition in desirable price ranges
Faster-moving listings
A shift toward a more balanced market

But this environment is dynamic. Inflation data and energy markets will play a significant role in shaping what happens next.

Final Thoughts

The past four years required patience and discipline from buyers and sellers alike. We may be entering a transitional phase where discretionary demand re-enters the market—but broader economic indicators still deserve attention.

Opportunity often exists in periods of transition. The key is staying informed and making data-driven decisions rather than reacting to headlines alone.

If you’re considering making a move this year, now is the time to evaluate your position strategically and prepare for what could be an active spring market. And as always, the best time to move is when it makes the most sense for YOU and your personal circumstances.

If you would like to chat about our market, your plans, and where you see yourself this year - reach out to us today. We'll gladly walk you through every step of the process.