At the 2025 Q4 real estate conferences, there was more than a little optimism that the real estate market would see significant improvement in 2026. All indications were positive for a growing market.
That didn’t turn out to be the case, however, as real estate professionals have experienced a less-than-stellar launch of the spring buying season.
The lackluster performance makes it more important than ever to pay attention to significant trends that may foretell where the market is headed as we navigate the coming months and to continue to adjust future expectations based on data, not optimism.
First Canary: Mortgage Applications
The real estate news outlets jumped on Rocket Mortgage CEO Varun Krishna’s pessimism about the summer buy/sell season after he noted that the normal Q2 pickup in sales is "simply not materializing” this year. His statement was dramatic coming on the heels of the company’s announcement that the Q1 revenues showed the highest profit the company has made in four years.
“Our real-time market indicators suggest that the mortgage market will not see the same sort of uplift in Q2 that historical seasonality would typically suggest,” Krishna told investors during a May 7earnings call, according to an article on TheStreet.com.
In line with this thinking, the company’s Q2 forecast fell far short of what industry pundits were anticipating.
Second Canary: Delinquency
Inflation is not only eating away at potential homebuyer downpayments, but it is also having a deleterious effect on current homeowners’ ability to keep up with their mortgage payments.
Earlier this year, the Mortgage Bankers Association announced that the delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.26 percent of all loans outstanding at the end of Q4 2025.
“Mortgage delinquencies increased across all three major loan types – Conventional, FHA, and VA – in the last three months of the year,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The most pronounced uptick was with FHA loans, which reached a delinquency rate of 11.52 percent, the highest level since the second quarter of 2021. While earlier-stage FHA delinquencies remained relatively flat compared to the previous quarter, later-stage, 90+ day delinquencies increased by 76 basis points. The FHA foreclosure inventory rate also grew to the highest level since the first quarter of 2020.”
This is a cautionary tale for current homebuyers who must factor in ongoing inflationary trends when calculating what they can afford. If wages do not keep pace as the cost of living increases future homeowners may find it tough to pay their mortgage if they have calculated their costs based only on today’s costs.
Third Canary: Consumer Confidence
The University of Michigan Surveys of Consumers released on May 8 showed sentiment dropped again this month, remaining below data from the Great Recession and the pandemic. This is another important data point to watch because though employment indicators remain steady, the reality of inflationary trends and concerns fed by political volatility continue to weigh on consumers, keeping would-be homebuyers on the sidelines.
Prior to the Great Recession, similar indicators began to surface that were largely ignored given the euphoria over the hot real estate market.
But real estate agents, loan officers and title agents can all take lessons from the past and keep a weather eye out on trends as they emerge throughout 2026. It is especially imperative to keep potential homebuyers anchored in reality about home values, financial commitments, and the necessity of building in a financial buffer to protect their investment for the long term.
At FAN, we maintain the highest standards in providing title, escrow and closing services throughout Florida, and in addition, we are dedicated to protecting the integrity of the real estate transactions we manage. Contact us today to learn how we can help you with your next transaction.
