Is Buyer Demand Picking Back Up? What Sellers Should Know.

The housing market is showing more energy than it has in a long time, and the data supporting it is hard to overlook. Mortgage rates have dropped by nearly a full percentage point this year, and that shift is bringing buyers back into the market.

Home loan applications are rising, activity is increasing, and sellers who act early may benefit from this momentum before competition intensifies.

Let’s take a closer look at what is happening behind the scenes and how you can take advantage of today’s market conditions.

When Rates Come Down, Buyer Activity Goes Up

In today’s housing market, buyer demand is closely tied to mortgage rates. When rates decline, applications for home loans tend to increase. Rick Sharga, Founder and CEO of the CJ Patrick Company, explains it this way:

“We’re in an incredibly rate-sensitive environment today, and every time mortgage rates drop into the low to mid 6 percent range, we see an influx of buyers entering the market.”

The data reflects this trend. Many buyers who were previously on the sidelines are applying for mortgages again as borrowing costs ease. While this activity will naturally fluctuate along with mortgage rates, the broader picture shows steady improvement since rates began to fall.

According to the Mortgage Bankers Association (MBA), the Mortgage Purchase Index is currently hovering at its highest level so far this year:

This is not the only positive sign. The Mortgage Bankers Association also reports that mortgage applications recently reached their highest level in nearly three years. This is a clear indication that buyer demand is trending in the right direction as we move toward 2026.

And in case you were wondering, this increase is not simply the result of pent-up demand from the temporary government shutdown that slowed some loan processing earlier this year. If you look at the previous graph, you can see a steady build in momentum throughout the entire year.

The key takeaway is this. As mortgage rates come down, buyers are gradually reentering the market. That renewed interest is translating into real contracts on homes like yours.

Home Sales Are Rebounding

To emphasize that the market is moving in a positive direction, the most recent report from the National Association of Realtors (NAR) shows that pending home sales, or homes under contract, are also on the rise. The Pending Home Sales Index is currently at its highest level of the year (see graph below).

This suggests the market is ending the year on a high note and heading into 2026 with renewed energy. While it may not feel like a huge shift, this rebound is noteworthy.

Pending home sales are a leading indicator of future closings. When more homes go under contract, it signals that more sales are likely to close in the coming months. This trend may help explain why experts forecast home sales to rise slightly in 2026 compared to 2025 and 2024.

There may still be some fluctuations due to year-end volatility in mortgage rates, but these changes are not expected to alter the overall trend. Experts anticipate that rates will remain relatively steady throughout 2026, setting the stage for continued momentum in the housing market.

What This Means for You

Here is the opportunity. Selling now offers several advantages:

More buyer demand: As affordability improves, you could see increased buyer traffic and more showings if your home is priced and staged effectively. The best part is that buyers who are re-engaging feel like they have waited long enough, making them eager to move.
Being ahead of the curve: Listing your home sooner rather than later puts you in front of the competition before other sellers recognize the market shift.

Whether you have delayed selling because you thought buyers were inactive or removed your home from the market due to low interest, this is your signal to act.