Four years after rate hikes, affordability challenges still run deep
January 2026 marked four years since mortgage rates started climbing and pushed the US housing market into a new regime of higher borrowing costs, fatter inventory and still‑elevated prices.
Realtor.com’s latest analysis showed the adjustment resembled a slow recalibration rather than the clean reset many borrowers and lenders hoped for, with affordability remaining under strain even as conditions cooled from pandemic extremes.
Since early 2022, 30‑year mortgage rates peaked near 7.79% before easing to roughly 6.1%, while active listings surged 142.1% from rock‑bottom levels nationwide.
However, the median list price still rose 8.1% and price per square foot climbed 11.4% over the same period, underscoring how higher financing costs alone have not delivered broad price relief.
Recalibrated market, persistent affordability squeeze
“Four years into this higher‑rate environment, it’s clear that the housing market recalibrated rather than reset,” Jake Krimmel, senior economist at Realtor.com, said.
“Supply and demand moved in the directions economic theory would suggest, but prices proved far more resilient than many anticipated, leaving today’s affordability challenges firmly in place.”
At the center of that disconnect sat the lock‑in effect. Realtor.com’s analysis found that a substantial majority of outstanding mortgages still carried rates well below prevailing levels, with over 50% of borrowers holding loans under 4%.
For many owners, moving would have meant swapping a once‑in‑a‑generation deal for a payment nearly twice as expensive.
“That’s the tension in today’s market,” Krimmel said. “Lower rates could unlock more supply, but they could also bring buyers back faster than listings recover. The path to meaningful affordability relief depends on supply growing sustainably – not just demand returning.”
Regional splits, but prices mostly held
The inventory rebound has been highly uneven. Listings more than doubled in the West and South – up 211% and 178% respectively – and soared above 350% in metros such as Dallas, Raleigh, Austin and Denver.
By contrast, inventory gains were far smaller in the Northeast and Midwest, and markets including Chicago, Hartford and New York actually had fewer active listings than four years earlier.
Even so, only eight of the 50 largest metros posted declines in list price per square foot since January 2022, with forty‑two recording gains. “What we’ve learned is that the laws of supply and demand still apply, but the relationship has weakened,” Krimmel said. “Even a flood of listings and much higher financing costs weren’t enough to generate broad‑based price relief.”
Longer listings, rising delistings reshape supply
By early 2026, more of the inventory on the market reflected homes simply sitting for longer, not a wave of new sellers.
The ratio of new listings to active listings fell from about 86% in January 2022 to just 36% in January 2026, while median days on market lengthened from 59 to 78 days, compared with a pre‑pandemic January norm of 84 days.
“This shift indicated that the rise in active inventory had been driven less by a steady stream of new sellers entering the market and more by homes remaining listed for longer periods,” Krimmel said.
“Sellers were patiently testing price levels and waiting for buyers, rather than pricing aggressively to move quickly.”
Delistings also rose sharply and acted as a backstop against deeper price cuts.
Over the past five Januaries, delistings more than doubled as a share of active listings and quadrupled as a share of new listings, reaching 7.0% and 32.0% respectively by January 2026.
In Krimmel’s view, that reflected homeowner strength rather than stress.
“In many cases, delisting reflected not seller distress but privilege, where today’s homeowners sat on historically high levels of home equity and a strong majority had low fixed mortgage rates,” he said.
“That combination gave sellers flexibility and the luxury to list, delist, repeat until they got their price.”
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