There is a glacial improvement in housing affordability. While it can be proven statistically, it still may not seem dramatic enough to change the plans of many buyers or sellers. Here is the real estate market forecast for March 2026.
Jim Breeze, senior vice president at PNC Bank, expects March to be similar to last year, and maybe “a little better.”
Last year, PNC saw a 47% increase in mortgage applications from January to April, with the initial rebound beginning in March (a 38% increase compared to January 2025).
“That’s really typical of the mortgage industry as a whole,” Breeze told Yahoo Finance. “November, December and January tend to be slower. Then you start to get into the period where people are thinking about making that move. Then they start looking to prepare for those summer months.”
Breeze noted that planning ahead is key. Talking to a mortgage advisor well before looking for a home can uncover potential affordability levers that can be pulled.
“There are a lot of down payment assistance programs that people may not know about. If you talk to someone, that dream of affordability might have increased, because now there is some other mechanism that will help you get that new home,” he said.
Read more: Down Payment Assistance: How It Works and How to Qualify
Housing affordability is gradually increasing. A new Zillow analysis found that affordability has improved by more than $30,000 from a year ago, driven by rising incomes and falling mortgage rates. That means a middle-income household can now afford a $331,483 home. Zillow said it is the highest affordable price since March 2022.
Here’s a closer look at the factors that impacted housing affordability in March.
Mortgage rates are slowly becoming more favorable, falling to levels not seen since September 2022.
Mortgage rates began to slowly fall in mid-November. Now, more sources report loan rates below 6%. Yahoo Finance’s weekly survey of lender rates shows 30-year fixed rates as low as 5.5%; rates were over 7% a little over a year ago.
If rates remain calm in March or decline further, purchase and refinance activity will continue to grow.
“The stabilization of mortgage rates near 6% this spring marks a notable inflection point where, for the first time since the post-pandemic peak, both the psychological barrier and numerical threshold of the 5% range have finally been reached,” Realtor.com economist Jiayi Xu said in a statement. “A lower rate could possibly see more homeowners who were previously ‘locked in’ finally return to the market.”
Home price growth is slowing, with the housing market appreciation at its lowest since the recovery began after the Great Recession, according to the S&P Cotality Case-Shiller Index.
This can be a double-edged sword: Buyers welcome moderation in price increases, but home sellers may withdraw their properties from the market, hoping for more favorable pricing conditions.
“2025 marked the end of an unprecedented period of price growth,” said Thom Malone, chief economist at Cotality. “After a five-year winning streak, including peaking at 19% in 2021, growth fell to just 1.3% in 2025. The market is now waiting for the broader economy to catch up.”
Malone expects only nominal price growth in 2026.
Read more: This map shows the median home price by state.
Nearly two-thirds of homebuyers in 2025 (62.2%) received a discount off the list price. Redfin’s analysis of MLS listings found that the typical buyer received a 7.9% price cut, the largest since 2012.
“Homebuyers in 2026 should not write off homes that are slightly over their budget because there is a good chance they will get some kind of concession from the seller, whether it be a price cut, money for closing costs or funds for repairs,” reported Redfin senior economist Asad Khan.
Redfin reported that as of February 22, 2025, there was a 5.1-month supply of homes for sale. “4 to 5 months of supply is considered balanced, with a lower number indicating seller market conditions,” Redfin noted.
However, Realtor.com’s latest Housing Supply Gap Report found that new construction could not meet demand, and the housing supply gap widened by more than 4 million homes in 2025.
“Even as annual construction and household formation are roughly balanced, the market is still emerging from more than a decade of underbuilding,” Danielle Hale, chief economist at Realtor.com, said in a statement.
New listings are 80,595, down 2.8% year over year, according to Redfin.
Redfin reports that the median days on market is 67, an increase of eight days and the longest in nearly seven years.
The Mortgage Bankers Association says it’s getting easier to qualify for a mortgage, based on your credit availability index. The measure of credit availability bottomed in November 2023 and has generally been rising since then, a sign of credit easing.
“The beginning of the year is typically when lenders begin to position themselves for the rebound in spring home purchases, and recent declines in mortgage rates have provided windows of refinancing opportunities, including ARM loan refinances,” Joel Kan, deputy chief economist at MBA, said in a report.