The Housing Market Is Turning a Corner Going into 2026
Spectrum Real Estate Consultants
Spectrum Real Estate Consultants Team is the top producing team of Realtors at Keller Williams Realty Leading Edge completing over 1,000 successful tr...
Spectrum Real Estate Consultants Team is the top producing team of Realtors at Keller Williams Realty Leading Edge completing over 1,000 successful tr...
After several years of high mortgage rates and hesitation from buyers, momentum is quietly building beneath the surface of the Southern New England housing market. Sellers across Rhode Island, Massachusetts, and Connecticut are reappearing. Buyers are re-engaging. And for the first time in what feels like forever, there's movement happening again throughout Providence, Boston metro, and Hartford markets.
No, it's not a surge. But it is a shift – and it's one that could set the stage for a stronger year in 2026 for those looking to buy a house in RI, buy a house in MA, or buy a house in CT.
So, what's driving the comeback across Southern New England? Here are three big trends that are slowly breathing life back into the Rhode Island, Massachusetts, and Connecticut housing markets right now.
1. Mortgage Rates Have Been Coming Down Across Rhode Island, Massachusetts, and Connecticut
Mortgage rates are always going to have their ups and downs – that's just how rates work. Especially with the general economic uncertainty right now, some volatility is to be expected. But, if you zoom out, it's the larger trend that really matters most for Southern New England home buyers.
And overall, rates have been trending down for most of this year across Rhode Island, Massachusetts, and Connecticut (see graph below):
And in just the last few months, we've seen the best rates of 2025. According to Sam Khater, Chief Economist at Freddie Mac:
"On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving."
Here's why that matters for you when you buy a house in RI, MA, or CT. This shift changes what you can actually afford. It means lower borrowing costs and more buying power throughout Southern New England. Take this as an example.
Data from Redfin shows a buyer with a $3,000 monthly budget can now afford roughly $25,000 more home than they could one year ago. That's a big deal for first-time home buyers in Rhode Island, Massachusetts, and Connecticut. And it's just one of the reasons why activity is picking up across Providence, Warwick, Boston metro, Worcester, Hartford, and throughout Southern New England.
2. More Rhode Island, Massachusetts, and Connecticut Homeowners Are Ready To Sell
For a while, many homeowners across Rhode Island, Massachusetts, and Connecticut stayed put because they didn't want to give up their low mortgage rate. That "lock-in effect" kept inventory tight throughout Providence, Cranston, Newport, Boston, Worcester, Hartford, and New Haven markets. And while plenty of Southern New England homeowners are still staying where they are today, the number of rate-locked homeowners is starting to ease as rates come down. Life changes are becoming a bigger part of what's driving more people to sell a house in RI, MA, or CT, and that's opening up more inventory across Southern New England.
Data from Realtor.com shows just how much the number of homes for sale has grown throughout Rhode Island, Massachusetts, and Connecticut. And the really interesting part is that the Southern New England market is approaching inventory levels that haven't been seen for the past six years (see the blue on the graph below):
That return to more normal inventory levels is a really good thing for buyers throughout Rhode Island, Massachusetts, and Connecticut. It gives buyers more options than they've had in years across Providence, Warwick, Boston metro, Worcester, Hartford, and all of Southern New England. And it's helping to bring the market closer to balance.
3. More Buyers Are Re-Entering the Rhode Island, Massachusetts, and Connecticut Markets
And it's not just sellers making moves across Southern New England. With more options and slightly better affordability, buyers are getting back in the game throughout Rhode Island, Massachusetts, and Connecticut, too. The Mortgage Bankers Association (MBA) reports purchase applications are up compared to last year, a clear signal that demand is building again for homes in Southern New England (see graph below):
And real estate experts think this momentum will continue across Rhode Island, Massachusetts, and Connecticut. Economists from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) all forecast moderate sales growth going into 2026 for the Southern New England housing market.
Now, this recovery won't happen overnight across Rhode Island, Massachusetts, and Connecticut. It's not a flood of activity. But it is the start of steady improvement going into 2026 for the Southern New England real estate market. And that's something a lot of people looking to buy a house in RI, MA, or CT have been waiting for.
Bottom Line
After several slower-than-normal years, the Southern New England market is finally starting to turn a corner. Declining mortgage rates, more listings, and growing buyer activity all point to a market gaining real traction across Rhode Island, Massachusetts, and Connecticut.
Let's connect to talk about what's happening in our local Southern New England market and how you can make the most of it in 2026 whether you want to buy a house in RI, sell a house in RI, or explore opportunities in Massachusetts or Connecticut.
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