Light at the End of the Tunnel

The Orange County housing market is quietly entering a new phase. After years of elevated borrowing costs and sluggish demand, mortgage rates have finally stabilized in a more favorable range. This shift didn’t happen overnight—it crept in slowly over the past few months, much like the gradual arrival of fall weather.

Rates Are Softening and Affordability Is Healing

For nearly three months, rates have held well below where they stood earlier this year and far below the peaks that pushed affordability to its limits. This is the longest and most stable stretch of relief since 2022. Little by little, that consistency is easing the pressure on buyers.

With the U.S. economy slowing rather than heating up, analysts expect mortgage rates to remain in a similar range through 2026. That puts next year’s spring market in a strong position to outperform the last three years.

Demand Is Still Low—But Not for Long

Buyer activity remains muted compared to pre-2022 levels, largely because high borrowing costs over the past few years kept buyers sitting on the sidelines. Holiday season distractions naturally push demand even lower.

But for the first time in a long time, the environment is improving instead of worsening. As affordability continues to stabilize, Orange County is set up for a more energized spring, when buyers traditionally return in the largest numbers.

Inventory Is Shrinking Fast

Orange County inventory has been falling quickly—partly due to seasonal trends, and partly because homeowners continue to hold onto the low mortgage rates they locked in years ago.

Though more sellers have chosen to list in 2025 compared to the previous two years, the overall number of homes hitting the market is still far below normal levels. As unsuccessful listings get pulled for the holidays, inventory is expected to bottom out before building again after the New Year.

Luxury Market Conditions Improve

The luxury segment—homes priced above $2.5 million—has actually strengthened over the past couple of weeks. Fewer new listings and seasonal delistings have tightened supply, improving the balance between active listings and buyer activity. Although demand dipped, the reduction in inventory was substantial enough to keep the luxury market moving more efficiently.

What It All Means

Momentum is forming beneath the surface. Rates are more manageable, affordability is noticeably better than earlier in the year, and the stage is set for a healthier spring market in 2026.

The shift won’t feel dramatic at first—but when it hits, it will feel sudden.

Whether you’re buying or selling in Orange County next year, planning early will put you ahead of the curve.
Reach out to schedule a personalized market strategy session. I’ll walk you through timing, pricing, and what to expect as the market transitions into 2026.

Let’s get prepared before the competition does.