The 30-year fixed mortgage rate averaged 6.58% in the week ending February 21, 2026, according to Freddie Mac's Primary Mortgage Market Survey — the lowest reading since January 2023. That still sounds high compared to the 3% rates that defined the pandemic era, but it has been enough to unfreeze a market that spent 2024 in near-paralysis.
Existing home sales rose 6.4% in January 2026 compared to a year earlier, snapping a 26-month streak of year-over-year declines, according to the National Association of Realtors. The improvement is real but modest — sales are still running well below the pace of 2019, let alone 2021. The core problem has not changed: homeowners who locked in 3% mortgages between 2020 and 2022 have little financial incentive to sell and give up that rate, which keeps inventory tight and prices elevated even as demand cools.
The affordability math remains grim in major coastal cities. The median monthly mortgage payment on a median-priced US home purchased today at current rates is approximately $2,100 — compared to $1,050 on the same home purchased in early 2021. First-time buyers without equity to roll over from a previous sale are the most affected cohort, and the homeownership rate for adults under 35 fell to 37.2% in Q4 2025, a 10-year low.
“Climate risk is becoming a pricing factor that was mostly absent from real estate decisions five years ago.”
The geographic divergence is stark. Markets like Raleigh, Columbus, Indianapolis, and Kansas City have seen relative affordability hold up better than coastal metros, driven by in-migration from higher-cost cities and a larger supply of new construction. Texas markets like Austin and Dallas, which saw sharp price appreciation in 2021–2022, have now fully corrected from their peaks — Austin median prices are down roughly 18% from their 2022 highs, giving buyers there more room than in most major cities.
Climate risk is becoming a pricing factor that was mostly absent from real estate decisions five years ago. Florida homeowners have seen property insurance costs in coastal counties rise 30–50% since 2023, with several major insurers — including Farmers and AAA — having withdrawn from the state entirely. Buyers in high fire-risk California counties face similar dynamics. Lenders are beginning to incorporate climate risk scores into underwriting, a practice that was experimental in 2023 and is now increasingly standard among the top-10 mortgage originators.
