For the past few years, the housing market across Philadelphia, the Main Line, and South Jersey has felt stuck in neutral.
Higher mortgage rates, limited inventory, and cautious buyers created a slowdown that left many homeowners wondering whether meaningful momentum would ever return.
So the question heading into the new year is simple — can home sales actually rise in 2026?
The early data suggests they can. And the signals are already showing up.
Pending Home Sales Are the First Indicator to Watch
Pending home sales — homes going under contract — remain near three-year highs nationally, and that matters locally too. Pendings are the clearest leading indicator of future closings.
In Philadelphia and the surrounding suburbs, contract activity has been more resilient than many national headlines suggest, particularly in well-located neighborhoods and move-up price points.
Markets like Center City, Fairmount, Fishtown, and the Main Line continue to benefit from limited supply, while parts of South Jersey — including Haddonfield, Cherry Hill, Moorestown, and Margate — are seeing buyers return as affordability improves relative to peak pricing.
Closings always follow contracts. When pendings rise, sales volume typically follows.
Mortgage Rates Are Lower Than Last Year — And That Matters
Mortgage rates remain elevated compared to the ultra-low levels of the pandemic years, but they are meaningfully lower than this time last year.
That shift alone has reopened conversations for buyers who had previously stepped back. In markets like Philadelphia and South Jersey, where price growth was steadier and less speculative than Sun Belt markets, even small improvements in rates can have an outsized impact on buyer confidence.
The 2026 Housing Market Outlook highlights that affordability is improving not through a dramatic price correction, but through a combination of:
-
Stabilizing home prices
-
Gradually rising incomes
-
Mortgage rates that are no longer moving sharply higher
That combination creates conditions for increased transaction activity — especially in historically supply-constrained regions like the Northeast.
Why Q1 of 2026 Is a Critical Moment
If Q1 of 2026 opens with sustained pending home sales, it signals something important for our local market:
-
Buyers are adjusting expectations rather than waiting indefinitely
-
Sellers are pricing more realistically from the start
-
Confidence is rebuilding quietly, not emotionally
In Philadelphia and South Jersey, where inventory remains relatively tight compared to national averages, even modest increases in buyer demand can translate into higher sales volume without triggering downward price pressure.
This aligns with one of the core themes from the national outlook: the Northeast and Mid-Atlantic continue to behave very differently than oversupplied Sun Belt markets.
A Rebound Won’t Announce Itself
Housing market rebounds rarely start with bold headlines. They start with small, data-driven shifts — more contracts, fewer withdrawals, and buyers re-engaging when conditions stabilize.
That’s what we’re watching now in Philadelphia County, Montgomery County, Delaware County, and South Jersey markets.
It doesn’t mean every neighborhood will perform the same way. Local pricing, property condition, and strategy matter more than ever. But the conditions for a rebound in sales volume are forming.
Want the Full Local & National Breakdown?
Our 2026 Housing Market Outlook dives deeper into:
-
Home sales forecasts
-
Mortgage rate scenarios
-
Inventory trends
-
Regional differences — including why markets like Philadelphia are positioned differently than much of the country
If you’d like access to the full report, comment “2026” and we’ll send you the link.