‘Winter is coming’: Home affordability is at a 3-year high, with inventory up almost 13% in a ‘sneaky good market.’ Here’s why it might not last

The 30-year fixed-rate mortgage averaged 6.22% (as of Nov. 26), compared to 6.6% a year ago at the same time, according to Freddie Mac (2). And incomes are outpacing inflation, pushing the typical mortgage payment share of income below 30% for the first time since 2022, according to Realtor.com’s 2026 housing forecast (3).

Median home prices are down 0.25% and housing inventory is up 12.8% year over year, according to Zillow, with the median home price now sitting at $362,117. While this isn’t exactly back to the pre-pandemic normal, it’s “a big improvement over the 51% shortfall seen in February 2022.”

But winter is coming — both literally and metaphorically. “While fall has been a sneaky good market for buyers and sellers who stuck it out past the busy season, winter is coming, and may bring rate volatility with it. This warmup is not guaranteed to last,” said Kara Ng, Zillow senior economist, in a Zillow blog post (1).

Whether you’re looking to buy or sell (or both), here’s what you need to know.

Now may be the moment

For buyers, these conditions could offer more choice and less competition. But with winter coming, less favorable conditions could lie ahead — particularly if mortgage rates reverse course. If buyers choose to wait, they could risk higher rates or revived competition.

For sellers, conditions could be more challenging right now, but demand remains: On a national level, home prices were up 1.3% in October 2025 compared to the same time last year, selling for a median price of nearly $440,000, according to Redfin (4).

While affordability is improving, it’s still only better than recent years in relative terms — and houses are far from cheap across the board. Regional conditions play a role in whether it’s a buyer’s or seller’s market.

According to one real estate analyst, the U.S. housing market will be marked by a stark regional divide in 2026.

“Rust belt cities like Cleveland, Hartford, Albany and Chicago are all still appreciating and have tight inventory. Meanwhile, Sun Belt cities across Florida, Texas and Arizona are now in decline, with decade-highs in inventory,” Nick Gerli, CEO and founder of real estate analytics platform Reventure App, wrote in a post on X (as reported by Newsweek) (5).

For buyers, home values have declined in 24 of 50 major metros when compared to the same time last year, according to Zillow’s data. Markets where home values are declining most include Austin (where they’ve dropped -6.1%), Tampa (-6.1%), Miami (-4.8%), Orlando (-4.6%) and Dallas (-4.0%) (1).

Some markets are still in sellers’ favor. Zillow points to Hartford, Conn., as one of the “hottest sellers’ markets in the country” right now, with home values up 4.3% from the same time last year. This is thanks to a healthy job market and “lower home values compared to pricey metros like New York and Boston that are within commuting distance” (1).

But overall, the market is steadying. Realtor.com’s 2026 housing forecast predicts a “more balanced market” in the coming year, as “price growth steadies, rate relief offers breathing room and negotiating power tilts subtly toward buyers.”

Still, analysts expect this recovery to be slow, with home sales remaining below normal and housing affordability continuing to be “a stumbling block for many, especially younger and first-time buyers.”

An opportunity for most, with regional differences

While there’s a window of opportunity for both buyers and sellers, depending on your local market, seasonal headwinds might tighten this window. Economic and policy risks are also creating uncertainty as we head into 2026.