The U.S. Housing Market Hotness Index opened 2026 at 87.12, slipping from 88.33 in the final week of December 2025 and underscoring how affordability constraints continue to weigh on the market. High home prices and borrowing costs have kept many buyers on the sidelines, dampening demand nationwide. That said, some modest relief may be on the horizon this year. Mortgage rates are edging lower than their 2025 levels, and income growth is expected to outpace home price appreciation in 2026, offering a slight improvement in purchasing power. In addition, recent policy proposals could influence market dynamics, including a potential ban on large institutional purchases of single-family homes, which could ease competition for buyers, and a plan for the federal government to purchase $200 billion in mortgage-backed securities, a move aimed at pushing borrowing costs lower.
Even with these developments, the housing market remains highly fragmented by region. Monroe and Erie Counties in New York, Hartford County in Connecticut, Santa Clara County in California, and Norfolk County in Massachusetts ranked among the nation’s hottest markets. In contrast, parts of Florida and Texas remain under pressure, with Miami-Dade and Broward Counties in Florida, Travis County in Texas, Davidson County in Tennessee, and the District of Columbia among the weakest markets.
*Index values are subject to revision as deemed necessary, contingent upon the receipt of new or updated data.
