Each week, I analyze the evolving dynamics of the market, identifying emerging trends, shifts in momentum, and key considerations for real estate professionals. Last week, the Federal Reserve left the federal funds interest rate unchanged after three cuts in late 2025, with Chair Jerome Powell noting that the economy entered 2026 on firm footing. Data from ATTOM indicates that last year’s median home sale price rose 2.6% year-over-year to a new national record. Plus, according to Cotality, easing mortgage rates may support an uptick in home buying activity, but constrained inventory and rising non-mortgage expenses are likely to keep competition uneven and market conditions highly dependent on local dynamics.

February 2, 2026

FED HOLDS RATES. The Federal Reserve paused its easing cycle at the January meeting, keeping the federal funds rate at 3.75% and signaling confidence in an economy that continues to expand at a solid pace with low job gains, a stabilizing unemployment rate, and inflation that remains somewhat elevated. The statement suggested a more balanced view of risks to both employment and price stability compared with December. The National Association of Home Builders continues to expect two additional rate cuts in 2026 as inflation eases and the labor market cools. While changes to the federal funds rate do not directly move mortgage rates, they do lower financing costs for builders and developers, supporting efforts to expand housing supply and improve affordability. Full story from EYEONHOUSING →

• Why this Matters: The Fed’s decision to pause its easing cycle offers an important signal about the health and direction of the economy. By holding rates steady and describing conditions as solid, the Fed is indicating that inflation and the labor market are moving toward a more stable balance. This shapes expectations for future policy, influences financial markets, and affects the cost of borrowing for businesses and builders, which can support more housing supply at a time when affordability remains a major challenge.