February 09, 2026 – News released last week suggests that while the housing market will likely improve in the near term, there are concerns affecting the medium term that we should not ignore. Population growth has slowed to its weakest pace in years, and the slowdown could have a negative impact on housing demand if the current trends continue. Meanwhile, consumer sentiment has risen for three consecutive months, suggesting that households are gradually regaining confidence despite ongoing economic uncertainties. Job cuts, however, spiked to their highest January level since 2009, signaling lingering unease among employers. While both the economy and the market are expected to grow this year, mixed outlook will likely remain the norm for 2026.   

U.S. population growth slowed as California experienced a decline: Population in the U.S. grew at the slowest pace since 2021, according to the new 2025 population estimates released by the U.S. Census Bureau. The nation’s population increased by 0.5%, or 1.8 million, between July 1, 2024 and July 1, 2025, and the growth rate was the smallest since reaching a historically low 0.2% in the early period of the COVID era. The slowdown in population growth was due primarily to a sharp decline in net international migration, which dropped from 2.7 million to 1.3 million in the 12-month period.  If current trends continue, net international migration could dip another 1 million in the next 12 months. Meanwhile, population growth due to natural causes neared 59k, which is roughly the same as in the prior year. At the state level, California was one of the five states that experienced a decline, with total residents dropping by 9,465. Like the nation, California and all other states including District of Columbia had lower net international migration compared to the previous year. The slowdown in population growth in the Golden State could have a negative effect on housing demand in 2026 and 2027 if the trends continue.

Share of underwater mortgages edged up but remained below historical norm: The percentage of seriously underwater properties – those with loan balance at least 25% more than the property market value – inched up in 2025Q4 from both the prior quarter and the same quarter of the prior year, according to ATTOM. The share of mortgages seriously underwater across the U.S. increased to 3.0% in 2025Q4 from 2.8% in 2025Q3 and 2.5% in 2024Q4. Despite the increases, the share remained low compared to the pre-Covid level of 6.4% recorded at the end of 2019. States with the highest shares of seriously underwater mortgages were concentrated in the Midwest and the South, with Louisianan (10.7%), Mississippi (8.3%), and Kentucky (7.9%) leading the pack. California (1.7%) was among one of the states with low share of seriously underwater mortgages, although its percentage in 2025Q increased from 1.6% in the prior quarter and 1.3% in the same quarter in 2024. With home prices in California expected to grow moderately, the number of seriously underwater homes should drop in the next 12 months.

Homeownership rate inched up in late 2025: Slower price growth and more moderate interest rates helped put more people in homes at the end of last year. Homeownership rate at the national level rose slightly in the last quarter of 2025 to 65.7% from 65.3% in 2025Q3 but was flat compared to the same quarter in 2024, according to the latest U.S. Census’s Housing Vacancy Survey. Despite the modest quarterly increase, homeownership rate in 2025Q4 remained below the peak of 69.2% recorded in 2004 and was lower than the 25-year average of 66.3%. It is also important to note that the latest data was collected during the government shutdown and only two months of data was collected instead of three months. The level of accuracy of the data could be compromised as such. Among all age groups, homeownership improved the most for people under 35, with their homeownership rate rising 1.6 percentage points (ppts) to 37.9% in 2025Q4. Homeownership rate for households ages 55-64 also inched up, while all other age groups declined. At the state level, California climbed slightly to 55.3% from 55% in 2025Q3 but slipped from 55.5% in 2024Q4. With housing affordability projected to improve in 2026, homeownership rate could inch up further in coming quarters, but the increase will likely be small in the near term.      

Job cuts surged to the highest January total since 2009: Employers in the U.S. cut 108,435 jobs in January, an increase of 118% from the 49,795 cuts recorded in January 2025 and a jump of 205% from the 35,553 cuts announced in the prior month, according to the latest release from Challenger, Gray & Christmas, Inc. The total job cuts last month were the highest for a January since 2009 when 241,749 cuts were announced. A high number of job cuts in the first quarter is not unusual, but last month’s total was high even by January’s standard, which could be a reflection that employers remain less-than-optimistic about their business outlook. Georgia (31,415) had the highest number of layoffs at the start of 2026, followed by Michigan (19,714), and Washington (19,526). California had 8,286 layoffs in January, a sharp decline from 11,862 cuts announced 12 months ago. The state’s relatively calm layoff condition is a good start for the year and may suggest more stable labor market conditions in coming months.

Consumer sentiment increased for the third straight month and reached a six-month high: The latest measure of consumer sentiment defied economists’ expectations and ticked up again, with the index climbing to the highest level since August 2024. The University of Michigan’s index in February rose on a monthly basis for the third time since November but remained 7.4 points below its 12-month ago level. The survey was closed before the stock market’s selloff last week, which could have a negative effect on the sentiment in its next release. Despite the upticks in recent months, the overall sentiment level continued to stay low by historical standards as Americans remained concerned about the outlook of their personal finance and the elevated risks of losing their jobs.

Note: This summary report gets updated every Monday by 6:00 pm PST. Feel free to email us at [email protected] if you have any questions and/or feedback.

Download This Week's Write-Up

Weekly MLS Market Data Report

Quarterly Member Sentiment Report 
(Survey discontinued as of 2026)