March 2026 Housing Market: Slow but Steady Improvements for Buyers and Sellers

The housing market in March 2026 is slowly becoming a bit more favorable for buyers, particularly in terms of affordability. However, the improvements are happening at a slow pace, and many people may not yet feel a significant difference. Experts say the data shows a slight improvement in affordability, but it might not be enough to drastically change buyers' or sellers' decisions right now.

March is traditionally the time when people start seriously considering buying homes before the busy summer home-buying season begins. Jim Breeze, senior vice president at PNC Bank, noted that the housing market in March 2026 will likely resemble last year's market but with slight improvements. Breeze explained that the mortgage market typically follows a seasonal pattern. According to PNC Bank data, mortgage applications increased by about 47% between January and April last year, as reported by Yahoo Finance.

The first significant increase in mortgage applications usually starts in March. For instance, applications in March 2025 were 38% higher than in January 2025. Breeze said the months of November, December, and January are typically slow for home buying due to holidays and winter plans. After these slower months, people start thinking about moving homes during the summer, so they begin planning and applying for mortgages around March.

Breeze also advised buyers to consult a mortgage advisor before they even start looking for houses. Early consultations can help buyers understand different financial options that could make a home more affordable. For example, there are many down payment assistance programs that some buyers might not be aware of. These programs can sometimes make it easier for people to afford their dream home if they get the right advice early.

Another positive sign in the housing market is that home affordability has improved slightly over the past year. A new analysis by Zillow found that affordability has improved by more than $30,000 compared to last year, as reported by Yahoo Finance. This improvement is mainly due to rising incomes and falling mortgage rates. As a result, a household earning the median income can now afford a home priced around $331,483.

Zillow noted that this is the highest affordable home price level since March 2022. Mortgage rates are also improving and are now at levels not seen since September 2022. Mortgage rates started to decline around mid-November last year. Some lenders are now offering loan rates below 6%, which is significantly lower than last year. Yahoo Finance’s weekly lender survey showed 30-year fixed mortgage rates as low as 5.5%.

Just over a year ago, mortgage rates were above 7%, making homes much more expensive to finance. If mortgage rates remain stable in March or drop a little more, both home buying and refinancing activity could increase. Realtor.com economist Jiayi Xu said mortgage rates staying near 6% could be an important turning point in the housing market. Xu explained that the market is finally crossing the psychological barrier of mortgage rates being in the 5% range again.

Lower mortgage rates may also encourage some homeowners who were previously “locked in” to their old low rates to start selling their homes again. At the same time, the growth of home prices is slowing down. Data from the S&P CoreLogic Case-Shiller Index shows that housing price growth is now at its slowest level since the market recovered after the Great Recession, as reported by Yahoo Finance. Slower price growth can be beneficial for buyers because homes are not becoming expensive as quickly as before.

However, this situation can also make some sellers hesitant to list their homes as they might wait for better prices in the future. Thom Malone, principal economist at CoreLogic, said 2025 marked the end of a very unusual period of rapid home price growth. Home prices had grown strongly for five straight years, including a 19% peak growth in 2021. However, price growth dropped sharply to only 1.3% in 2025.

Another trend helping buyers is that many buyers last year were able to negotiate lower prices than the listing price. In 2025, about 62.2% of home buyers received a discount off the original list price. The typical discount was around 7.9%, which is the largest average price cut since 2012. Redfin senior economist Asad Khan said buyers in 2026 should not ignore homes that are slightly above their budget. Buyers may still be able to negotiate something from sellers, such as a lower price, help with closing costs, or money for home repairs.

Housing supply is also a crucial factor in the market. Redfin reported that as of February 22, 2025, there was about a 5.1-month supply of homes for sale. Experts say a 4 to 5-month supply is considered a balanced market between buyers and sellers. When supply is lower than that range, the market usually favors sellers. Even with new construction, the US housing market still has a significant shortage of homes. Realtor.com’s Housing Supply Gap Report found that the housing shortage grew by more than 4 million homes in 2025. Danielle Hale, chief economist at Realtor.com, said the housing market is still trying to recover from more than a decade of underbuilding homes.

Even if construction and household formation become balanced each year, the housing market still needs many more homes to close the supply gap. Meanwhile, the number of new homes listed for sale is slightly decreasing. Redfin reported 80,595 new listings, which is 2.8% lower than last year. Homes are also staying on the market longer before being sold. The median time for a home to sell is now 67 days, according to Redfin. This is eight days longer than before and the longest selling time seen in nearly seven years.

Getting a mortgage is also becoming easier compared to previous years. The Mortgage Bankers Association tracks mortgage access through a credit availability index. This index reached its lowest level in November 2023, meaning it was very difficult to qualify for loans at that time. Since then, the index has been rising, indicating that lenders are gradually loosening their credit rules. Joel Kan, deputy chief economist at the Mortgage Bankers Association, said lenders usually prepare for the spring home-buying season at the start of the year. Kan added that recent drops in mortgage rates have also created new opportunities for homeowners to refinance their loans. Some homeowners are also refinancing into adjustable-rate mortgage (ARM) loans because of the lower rates.

Overall, the March 2026 housing market shows slow but steady improvements in affordability, slightly lower mortgage rates, slower price growth, and longer selling times. However, experts say the market is still adjusting, and major changes may take more time.