The Housing Market Is Quietly Waking Up: What’s Fueling the Shift

After a few slower years marked by high mortgage rates and cautious buyers, the housing market is finally showing signs of real momentum. Inventory is increasing. Buyers are becoming more active. And while it’s not a dramatic surge, it is a meaningful shift that could set the tone for a stronger, more balanced market heading into 2026.

Below are three key trends that are helping bring life back to the market right now—both nationally and here in the Bay Area.

1. Mortgage Rates Are Easing, Improving Affordability

Mortgage rates have fluctuated throughout the year, but the broader trend has been downward. That gradual decline has translated into more manageable borrowing costs and expanded buying power for many households.

Recently, rates reached some of their lowest levels of 2025, offering relief to buyers who had stepped back earlier in the year. Even modest rate improvements can make a measurable difference. For example, national data shows that someone with a fixed monthly housing budget now qualifies for noticeably more home than they did a year ago.

For San Francisco buyers—where every dollar of purchasing power matters—this easing has made re-entering the market feel more realistic.

2. More Sellers Are Returning, Boosting Inventory

For years, many homeowners held onto ultra-low pandemic-era interest rates and delayed moving. This “rate lock” kept inventory unnaturally tight, especially in competitive markets like San Francisco.

But that reluctance is slowly fading.

As rates ease and life circumstances change, more homeowners are choosing to list their properties. National listing data shows inventory levels climbing back toward pre-pandemic norms, levels not seen in several years.

More inventory means more choice—something buyers haven’t experienced in a long time. It also helps create a healthier, more balanced market where both buyers and sellers can make decisions without intense pressure.

3. Buyers Are Stepping Back In

Improved affordability and increased listing activity are motivating buyers who had been waiting on the sidelines. Mortgage application activity—often a leading indicator of buyer demand—has been rising compared to last year.

Housing analysts expect this steady growth to continue into 2026, supported by moderating rates, rising inventory, and more confidence among buyers who were previously priced out or hesitant.

It’s not a rapid rebound, but it is sustained forward movement.

What This Means Going Into 2026
The market isn’t racing ahead, but it is turning a corner. Three things are working together:

- Lower borrowing costs
- A growing number of homes hitting the market
- More buyers actively returning

For sellers, this shift can open strategic opportunities as buyers re-engage. For buyers, improved affordability and higher inventory can make the process feel more accessible than it has in recent years.

Our Takeaway

After several years of slowed activity, the housing market is gradually regaining traction—and that momentum is expected to build as we move toward 2026.

If you’re thinking about buying or selling in San Francisco, our team at Stuecher Manning Group can help you understand what this shift means for your timing, budget, and opportunities. Reach out anytime—we’re here to guide your next move with clarity and strategy.

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Source: www.keepingcurrentmatters.com