NerdWallet's Smart Money Podcast - Housing in 2026: Home Prices and Rates Are in Flux. Time to Make Your Move?

Episode Date: January 8, 2026

Learn what 2026 might bring for mortgage rates, home prices, and affordability, plus smart steps to buy or refinance. Will mortgage rates drop in 2026, and is it finally a good time to buy a home? How can you get your finances ready to buy or refinance, even if prices still feel out of reach? Hosts Sean Pyles and Elizabeth Ayoola discuss mortgages and the housing market to help you understand what to watch this year and how to plan your next move. But first, senior news writer Anna Helhoski and NerdWallet senior economist Elizabeth Renter join Sean to discuss what could shape the economy in 2026. They discuss how tariffs may filter into prices, what a cooling labor market could mean for jobs and wages, and why rising household debt delinquencies are a red flag to watch. Then, Abby Badach Doyle, NerdWallet mortgage Nerd, joins Sean and Elizabeth to discuss home buying and refinancing in 2026. They discuss how inventory and mortgage rates shifted through 2025, how Fed rate cuts can influence mortgage rates before they happen, and ways to make the dream of homeownership more realistic. Use NerdWallet’s free calculator to see how much house you can afford: https://www.nerdwallet.com/mortgages/calculators/how-much-house-can-i-afford Use NerdWallet’s free rent vs buy calculator to find out which option is best for you: https://www.nerdwallet.com/mortgages/calculators/rent-vs-buy-calculator  NerdWallet’s free mortgage refinance calculator can help you decide whether to refinance: https://www.nerdwallet.com/mortgages/calculators/refinance-calculator   See all of NerdWallet’s 2026 Best-Of Awards: https://www.nerdwallet.com/l/awards?utm_source=sm&utm_medium=podcast&utm_campaign=cm_organic_010826_podcast_sm_desc_allepisodes_best-of-awards  Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header In their conversation, the Nerds discuss: housing market 2026, mortgage rates 2026, home prices 2026, 30-year mortgage rate, mortgage refinance, refinance calculator, when to refinance, home affordability, down payment assistance, closing cost assistance, first-time homebuyer programs, buying a house in 2026, house hunting in January, winter home buying, seller’s market vs buyer’s market, housing inventory, housing supply, home buying budget, rent vs buy calculator, rent vs buy, credit score for mortgage, saving for a house, emergency savings, moving costs, closing costs, homeowners insurance costs, wildfire risk insurance, home repairs budget, buyer’s agent, inflation and mortgage rates, Fed rate cuts and mortgages, tariffs and inflation, and household debt delinquency. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's 2026. Do you think you'll be exploring any changes in your housing situation? If so, this episode is for you. Welcome to Nerd Wallet's Smart Money Podcast, where you send us your money questions, and we answer them with the help of our genius nerds. I'm Sean Piles. Later this episode, we'll be taking a look at some of the predictions for the housing market this year. But first, our weekly Money News Roundup, where we break down the latest in the world of finance, to help you be smarter with your money. Our news colleague, Anna Hilhaski, is here with us.

Happy New Year, Anna. Happy New Year, Sean. And I think it's pretty safe to say that we're all feeling reflective as the calendar turns over to 2026. So we're starting to think about what might be coming down the road in the now not-so-distant future.

And the future is often shaped by the past. So I am hoping today that we can look briefly at some of the things that happened last year that may impact what we're going to see this year and get some context for all of it. And there's no better person to help us do that than Nerdwalt's senior economist and friend of the show, Elizabeth Renter. Elizabeth, happy New Year to you. And thanks for starting the year with us. Hey, thanks for having me, guys. And friend of the show, I really like that.

I can't think of anywhere I'd rather be. That's exactly what you are. So first off, I'm hoping you can talk a little bit about what a standout moment in the economy last year was for you. And what had the biggest economic ripple effects? So that's a really tough question because, as we all know, 2025 was a crazy year when it came to impacts to the economy and potential impacts to the economy. But if I was to choose a single moment or event, it would sort of be the cluster that surrounded April and Liberation Day. So the announcement of the 10% universal tariffs, the reciprocal tariffs, and everything that happened relatedly to that after the fact, right? Clawbacks of tariffs, changing policies. And the story is still unfolding, both how it impacts inflation and what the

ultimate policies are going to be. Some of them are in the Supreme Court as we speak, those that were filed under the pretense of an economic emergency. So there's a lot going on with this topic, but it all started in April. What was the biggest one for you, Anna? Yeah, I mean, as you mentioned several times, tariffs. I think trade policy changes are most obvious and their effect on consumers, their effect on companies. You know, we saw a huge jump in business and consumer spending in the spring ahead of the tariffs going into effect. And now we're at a point where a lot of that inventory that was bought up in the spring is starting to wane, and we could end up seeing prices rise soon for all kinds of consumer goods.

I also don't want to forget the effects of the government shutdown on federal workers and SNAP participants. It's not that far behind in my mind, not to mention how it impacted economic data collection and reports, as we saw and didn't see. And we could end up being headed for another, at least partial shutdown at the end of this month. But was there one economic moment in 2025, where you can look back and say, that's when things really changed. Well, if you frame it by something that really changed in the year, I mean, again, there were multiple things, but it really felt like economic policy whiplash throughout the year. The one thing that stood out as far as change goes is when the Fed resumed cuts in September.

So they held rates steady throughout the first half of the year. They were looking at the new administration coming in, the new potential policies and the impacts of those policies. And they thought holding steady was the way to go until September. That change, when they decided to cut again, really told me that they saw the risks to the labor market as rising relative to the risks to inflation. And that was significant. Yeah, let's dig in a little bit more about what happened with the labor market last year. It's not looking quite as tight as it once was. Yeah, just a few years ago, things were totally different. It was very dynamic. And when I say dynamic, I mean, it was really good for workers, right? We call

called it the great reshuffling. People were quitting their jobs and moving to greener pastures, and that couldn't be further from what we see right now. The labor market has definitely chilled. Hiring rates and quits rates are low. People are staying in their current roles because they know the environment out there isn't really friendly to them. And that's true whether you're unemployed in seeking a job or whether you would otherwise be upgrading your job, looking for one with better pay and better benefits. So it's a tough job market. It makes things even more difficult for the Fed right now as well. So with all that table setting, what do you think you're going to be watching this year in the labor market? Do you feel like we're on track to hold

steady or do you think that we're going to keep weakening? That's a good question. I think what I'm going to be looking at specifically in the coming year is sort of what is causing the cooling right now or what is the big contributor to the cooling in the labor market. And specifically, what is caused by supply issues versus demand issues. So when you talk about supply in the labor market, what you're really talking about is not having enough workers in the industries that need them. And so this is really impacted by new immigration policies and enforcement actions that we're seeing. The way this would show up in the data is hiring would be slowing and the unemployment rate remaining relatively low. Now, demand-side issues are going to look like businesses truly pulling back on hiring because business is weak,

it costs too much to expand and hire, or they're just generally uncertain about the direction of the economy. What this looks like in the data is a rise in layoffs and rising unemployment. So currently, the signals are that both of these factors are at play in the cooling of the labor market, but I look forward in the months ahead to getting a little more clarity on which one is the driving force. Now, turning to prices, did inflation behave the way that you expected in 2025? Not really. There were a couple of surprises, but they weren't really dramatic. Just a few things that didn't go the way I anticipated the would.

number one, core inflation stayed stickier with housing and services inflation really holding overall inflation higher for longer. I didn't anticipate this. And that sort of precipitated the Fed pausing cuts in addition to all the policy things they were thinking about from December to September of this year. The other thing that didn't go the way that I thought it would was I anticipated faster pass-through of tariffs. I thought we were going to see more quicker impact to inflation from the tariffs that were implemented. You're going to hear a lot about tariffs this episode. Spoiler. Spoiler. But can you talk a little bit more about how they played into inflation so far? Tariffs have had the most direct impact to consumers on finished imported goods. So think about the

things that you buy directly from overseas or you buy off the shelf at retailers here that came straight from another country. So we're thinking about toys and electronics. Those we can already see price increases happening in the inflation data. intermediate goods or products that are used here to build things domestically have also been impacted, but it's to producers, the factories that are feeling the brunt of this. So we'll continue to see those intermediate goods trickle into consumer inflation, but it's going to happen a little bit at a time. And, you know, it's important to remember that unlike other factors, tariffs are pretty unlikely to cause persistent inflation. What you're looking for here is for these price increases

to hit the inflation data once and then cool off a bit. It does seem like we haven't necessarily felt the full effects of tariffs yet, and it's also possible that the tariffs could be rescinded. Can you talk a little bit more about that landscape? As far as tariffs go, we know the Supreme Court has a case on their desk right now. They're looking at the tariffs that were implemented under the International Emergency Economic Powers Act. And so I think we're expecting a decision on that fairly soon. Yeah, the Supreme Court's taken that up, and that would affect every single.

single reciprocal tariff that went into effect last year. So that's most of them. And the ruling should have a pretty big effect. It could result in businesses being owed an estimated $168 billion. It's really unclear what's going to happen next, but we should be getting a ruling as soon as this month. But I do want to point out that it's also possible that the Trump administration could use different avenues to enact new tariffs or try and reinstate the tariffs that they had already put out under two other trade acts that give the president some authority to take actions. And he's used some of those before, especially in his previous administration. So that's a big TBD, right? We don't know what's going to happen and the impacts of those tariffs

remains to be seen. And then I'm also looking at, you know, the impact of current immigration policy, particularly on the labor market. Again, this speaks to the supply issues in labor supply. Certain industries are going to be noticeably suffering and not just agriculture and manufacturing, we're talking about professional sectors where H-1B delays are impacting the labor market. Overall, as the months wear on, and we see how this impacts labor supply, this could mean really bad things for economic productivity and growth. And you've mentioned before the Federal Reserve. Do you think that the Fed's approach was effective in 2025 with the three rate cuts? And are we feeling those cuts yet? Well, the Fed was under considerable pressure last

year, I mean, not only explicit political pressure, but the pressure to make decisions with a lack of clarity, a lack of clarity about where the policies were headed and how they could impact the economy. Not to mention the data blackout that happened under the federal government shutdown. So are we feeling the impact of Fed rate cuts yet? Probably not. We know that it takes, quote, long and variable lags for monetary policy effects to hit the economy. So we'll likely be feeling the cuts not for potentially months down the road. And we may see another cut in 2026. Now, whether or not they will be effective, that's another big question mark. And that's going to remain a matter of discussion for years to come. I mean, there are still economic papers

being written about the response to the global financial crisis and the pandemic. So it remains to be seen. And are there any global events shaping the U.S. economy this year that you want to point out? Well, yeah, I don't want to downplay the impact of tariffs and say we're just looking at inflation and prices, right? We're talking about global trade policy and not just inflation and prices, but the second and third order effects of the tariff. So this is reorganizing of the global trade system. Protectionist policies here and abroad will change old relationships and forge new relationships. And the impact to economic productivity around the world could be significant. And this is another thing that's going to take months and years to

see what the true impacts are. But this is something definitely worth watching development. because, again, it speaks to more than just the prices we pay on imported goods. And where do you see prices going in 2026? Inflation is likely to remain high throughout the year, though it's unlikely to get much higher. So we're thinking around 3%. We're going to see continued pass-through from tariffs on items or in certain categories. And services inflation is likely to remain sticky due to high shelter and health care costs. One big unknown is wage pressures, and that can go back to the immigration policies.

So a lack of labor supply could drive up wages for native-born workers, and wage pressures like that can drive further inflation. We've talked a lot about different indicators, but is there any one that you'll be watching in 2026? Well, 202026 is a long year. I'm going to have my eyes on all of the indicators. I don't know if I have all of those eyes, but I'm going to work on it. But I think in the shorter term, one of the things I'm specifically looking at is layoffs

and how they show up in federal data. So during the federal data blackout that we saw in October and November, and we're still catching up to in December, and we will be for the next few months, we heard a lot from private data sources and private companies that were announcing layoffs or reporting big numbers of announced layoffs. So there's typically a pretty big difference between what is announced and what shows up in the federal data. The problem with that is announced layoffs rarely line up with the layoffs that actually show up in the data. So in the months ahead, I'll be looking to federal data to see what the layoffs actually look like at the end of 2025. And then another thing that I'm going to be keeping an eye on is household debt delinquency levels. So household debt levels have risen to and sometimes above what they were before the pandemic. Not only that, delinquency levels are rising. And this is a real indicator of

household financial fragility. We're seeing it across auto loans and credit card loans. So I will keep an on how many people are, you know, becoming increasingly delinquent on those debt balances. And, again, that speaks to their ability to weather economic storms, should something come down the pike later in the year. And what are some other concerns that you have heading into 2026? I'm a little nervous about that AI bubble bursting. AI investment was something that Fed Chair Jerome Powell had mentioned pretty frequently during his remarks after the Fed made its cut last month. We know AI has been a big economic driver. There's a big question mark as to whether a bubble

and the potentially burst bubble can be avoided? So that is a concern. Is it a bubble? And if it is, what happens when it bursts? And, you know, it's definitely something we should be keeping our eye on, particularly because consumer spending has been credited with keeping the economy healthy over the past few years. But there's evidence that the bulk of that spending is coming from high earners and specifically people with assets. So people with real estate and people with stocks. So should the market tumble and these households suffer, what does that mean for the broader economy? So again, And it goes back to that household financial fragility and the ability for households to really withstand economic shocks.

And where do you see the biggest risk of an economic surprise and, I mean, upside or downside? So I think this is a trick question because I feel like the biggest economic shocks are the ones we don't see coming. I mean, there's a lot of hindsight, like after an economic shock, people are like, well, we should have seen that red flag in this red flag. Right. But I mean, you think about the global financial crisis. There were a lot of risks bubbling beneath us. the surface, but they really weren't exposed at large until the Lehman Brothers Investment Bank collapsed and it spread across the world. The COVID pandemic, we definitely didn't see that one coming. So what comes next? I mean, we're all scanning the horizon, looking for the next big risk. And I don't have the answer because I think it might be something we're not anticipating.

Sure. Again, I'm looking at how well are households equipped to weather those storm, and I'm concerned right now that households are increasingly fragile. So any of those unforeseen shocks could be detrimental. Anything else you're going to be keeping an eye on this year? That might shape where the economy goes next. Yeah, so in the next year, I'm definitely keeping an eye on Fed independence. As we're recording, Trump is weighing a new chair, and by the time this airs, he may have named someone.

The big question is, will the new Fed chair be someone that is a loyalist and perhaps more prone to political influence, or will they support a truly independent Fed? An independent central bank is the bedrock of a modern and healthy economy, and so I'll be keeping my eye on that. And then longer term, a couple things. This year and beyond, I'm going to be paying attention to policies that are put in place to reduce the cost of housing. The main thing driving high housing costs is low supply. So what are municipalities, what are city and state governments doing to make it easier to build more housing that will ultimately bring costs down in the long term? And finally, one more thing, and this is a long, long-term thing, is the impact of reduced federal spending on science and research. We're seeing this now through reduced federal grants from the National Institutes of Health and the National Science Foundations. Reducing these federal

grants has a real impact to potential innovation and economic growth. It can impact us all through our access to modern medicines, impacts to food production, prices, job creation, and so on. And these things take decades to play out. You know, studies funded now are not going to lead to the research that can change 10 years from now. The problem with that is by the time we discover the impacts they're having, it's going to take decades to unwind them. So that's one thing I'm looking forward to in the long-term future. All right, Elizabeth Renter, thank you so much for joining us today with some great contacts for what we can expect in this new year. Thanks so much for having me.

And thank you, Anna. All right. Up next, Elizabeth and I get a preview of what's coming down the pike for the housing mark. market. But first, a reminder, listener, to send us your money questions. Maybe you want some help getting your credit in shape to buy a house this year, or maybe you and your partner have a financial disagreement that you want Elizabeth and I to referee. Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730 nerd. Or email us at podcast atnerballot.com. More in a moment. Stay with us.

We're back and continuing our series about your money in 2026. Now, last time we talked about investing, but today we're pivoting to mortgages and the housing market. We're taking a walk down memory lane, looking at how to get the best deal on a mortgage, sharing tips for house shopping if that's something you're doing right now. To help us explore the not-so-distant past, present, and future of the housing market, we're joined by mortgage nerd Abby Badek Doyle. Abby, welcome back to smart money. Thanks. Good to be back.

So let's start by talking about the housing market in 2025, beginning in the winter, which tends to be a little bit slower and then going into the peak, home buying and selling season in the summer and then into the fall. What happened? So at the start of 2025, the housing market was looking pretty sluggish. Prices were up, sales were down. And in January of last year, we were still seeing the 30-year mortgage rate hover around 7%. So all and all, kind of a rough start to 2025 from a buyer's perspective, beyond even

those seasonal trends that we see. But things began to thaw in the springtime, and that's when we started to see one of the most encouraging trends of 2025 for the housing market, which is real improvement in inventory and listed houses for sale. And by July, we saw inventory at its highest level since before COVID. So more houses to choose from is a huge win for homebuy. buyers. And then as 2025 came to a close, we finally started to see some much-needed relief on mortgage rates in the fall as mortgage markets anticipated those rate cuts from the Federal Reserve. So while it's still tough out there, in a few important ways, the housing market ended 2025 and a little bit better of a place than where it started. That's definitely a

highlight, and we love to see progress. And honestly, a little progress is better than none at all. Now, Abby, there were so many housing market predictions for 2025, as there are every year. For instance, J.P. Morgan Research expected house prices to increase by 3% overall and also expected mortgage rates to stay higher for longer. So were market predictions mostly accurate? There's always going to be some variation, Elizabeth, but I'd say the 2025 market pretty much did what everyone thought that it would. Like, we didn't see any wild swings in either direction. More inventory gradually came on the market, which is what most folks expected. And prices still went up, but we saw the rate of price growth kind of slow down compared

to previous years. One nice surprise, though, was lower mortgage rates. And for a while there, some forecasters didn't think that we would get to the low 6% range until 2026. But when we started to see those low 6% rates toward the end of 2025, October, anticipating that first rate cut from the Fed. mortgage rates briefly started flirting in the range of 5.9%. And, you know, that threshold between five and six is an important threshold for buyers psychologically. Like, it's not that much

different mathematically, but 6% feels heavy. But once rates dip into the fives, like even barely, buyers feel that sense of relief and they feel that sense of momentum, like the market is moving back in their favor. And given how expensive homes have gotten over the past five or so years, any relief in mortgage rates will help home buying affordability. Absolutely. Speaking of mortgage rates, some factors that typically impact those rates and the broader housing market include things like inflation, job growth, interest rates, public policy, location, and also broader economic performance.

So, Abby, can you talk about the factors that impacted the housing market most in 2025? Even with the relief that buyers saw with those lower mortgage rates, you know, when you zoom out, you can't ignore the effect of stubbornly high inflation. And that plus overall uncertainty with the job market is still clipping the wings of some would-be buyers. It's hard to get excited about mortgage rates in that low 6% range if you're still feeling the squeeze from higher grocery bills. Or if you were furloughed by the government shutdown and it drained your emergency savings, or if you're just plain worried about losing your job. Like, for a lot of regular folks, I think there's some larger economic forces at play that are making it still tough to jump in the game at all. So for the housing market to be truly buyer-friendly, we need a combination of significantly

lower mortgage rates and even more inventory. And we're headed in that direction, but we're not there quite yet. And I know last year we saw some Fed rate cuts. I want to know how it impacted the market. Quick explainer first, since I know I mentioned this earlier, the Fed doesn't set mortgage rates directly, but the rate that it does set, the federal fund rate influences mortgage rates. So if you're shopping for a mortgage, you know, it's wise to pay attention to what the Fed is doing. And the Fed meets every six weeks roughly. So in that week or two before they meet is when you start to hear most of that talk about rates, right? So in general, when you hear that buzz that the Fed is talking about cutting rates or might cut rates in the future, that's when you tend to see mortgage

rates go down, not after the Fed rate cut itself. So with the cuts that we saw in 2025, mortgage markets tended to price in those cuts before they happened. And of course, it's not always predictable, but that's the pattern that we see more often than not. We talk a lot about the housing market, but I think it's more accurate to say housing markets because it can vary from one city or state or even county to the next. Last year, some of the smaller metro areas saw stronger growth than larger areas. So can you talk about how different markets have been seeing different changes in what's been going on in terms of prices, inventory, all of that? I love this question, Sean, because it's convenient to look at a national average, but there's really no like national housing market. I'm using heavy air quotes for our audio listeners, right? So I'm in Pittsburgh where the median list price is around 270K. And I know that sounds cheap. It does. Average age of our housing inventory is among the oldest in the country. So maybe the prices are lower, but with an older home, you need to budget for significant repairs or upgrades either now or. in the future, like that big ticket stuff, like electrical, plumbing, heating, roof, like all that expensive stuff. Yeah, you're a homeowner. Have you had to deal with any of that at your house?

We had our roof recently replaced before we bought our home, but I'm looking at some appliances and some plumbing that I know is going to be an expensive project in the next few years. Well, I'm sure you're saving up for it. Yes, yes. So, you know, by comparison, my best friend, she lives in California in the East Bay. And the median price there is closer to 700K. And another difference that you see regionally, too, is the price of homeowners insurance. So out west, my bestie has to deal with like wildfire risk. And here up north, we have the polar vortex, freezing your pipes and all of that. So it's not just about what markets are doing in terms of prices and inventory, but it's also the ongoing cost of homeownership that makes every market

look different. So my best advice is if you are looking for a house, that's why it's important to team up with a buyer's agent, an experienced buyer's agent who knows the local market in your area and can give you advice specific to where you live. Now, Abby, towards the end of the year, we saw the market turn and it started favoring buyers due to decreasing demand and also increasing supply, which is a shift that many people I personally know have been wanting, considering it was a seller's market for so long. Now, I don't think I will ever. forget the craze that ensued during the pandemic, when buyers were purchasing homes without inspections because competition was so steep. It was insane, and I'm glad those days are behind us.

While the market did begin turning, costs were elevated for both mortgage rates and homes towards the end of the year. Now, Abby, how likely is it that people can achieve their home-buying dreams in 2026? According to NerdWallet's 2026 Consumer Outlook Survey, 17% of respondents plan to buy a new home. Is this a realistic goal to have? I know it's tough out there, Elizabeth, but I'm still an optimist at heart. And I really believe that if homeownership is your dream, you can make it happen. Just focus on the factors that you can control. This is one of those things like doom scrolling does not help you. Making a budget does, right? So a good place to start is to know what price range is even realistic for you. And NerdWallet has a great calculator to help you get

started there are how much house can you afford calculator. And that's a really great first step. Plug in your income, your monthly debt payments, about how much you expect to pay for a down payment. And that calculator can help you see real price ranges that are affordable, that are a little bit of a stretch, or it might be out of your budget entirely. And it also factors in today's interest rates in real time. Next, if you're planning on buying a house this year, make a list of your must-haves and then know where you're willing to compromise. Because if you're willing to compromise on some things, like that's where you can save money. And home buying gets more affordable if you have wiggle room on things like location or the size of a house or maybe you're willing to

look at townhomes or condos. All of these things are variables that can help bring down the price tag and get your foot in the door. We still know that home buying is really challenging for many people to afford. Do you have any tips for those who are on a tight budget or just don't think it's feasible for them to buy house? Definitely look into down payment and closing cost assistance programs. Most of those programs are geared toward low or middle income folks, and some of them do have location restrictions. But some programs, surprisingly, accept higher incomes, too, and have fewer restrictions. And there really is free money out there if you know where to look. Well, I love all of your optimism, Abby. But that said, we know that for some people, home buying is not going

to be in the cards in 2026, but maybe 2027 will be a better year for them. So in that case, they could use the next 12 months to really set themselves up for success to be able to buy a house. So what do you think people can do now to avoid getting in a situation next year where maybe they are in over their head financially or buying a house that they can't afford? We want people to make sure that home buying is something that fits into their budget in a reasonable way. Totally. And, you know, first of all, I want to stress that you don't need to buy a house to be an adult, right? Like, in some areas, especially higher cost of living areas, renting really might make more sense as a longer term choice. So shout out to another nerd wallet calculator,

our rent versus buy calculator can really kind of help you suss out the financials there. But if you know that you do want to be a homeowner and have that lifestyle and you have a year to prepare, I'd focus on two things, your credit and your savings. Well, let's start with some tips around credit. What do you have? So it's always good to know where you stand with your credit score, right? And as far as mortgages are concerned, the lowest mortgage rates go to buyers with scores of 740 and above. And even getting your score up into the 700s can really help you get a better rate. So if you're below that and time is on your side and you have a year to prepare, you can work on reducing any balances, keep making those

on-time payments, maybe ask for a credit limit increase. All of those small steps can really help over time. And next, boosting your savings. So when you buy a house, you'll need cash on hand for not just a down payment, but also closing costs, moving costs, and of course, like fun stuff like furniture and area rugs and, gosh, window treatments and blinds and the list goes on. Which gets very expensive, but it is maybe more fun to buy. Yes, yes. So I've said this before. I saved for about 10 years before ultimately buying our home. And it wasn't for lack of trying. Like, we had some offers along the way that weren't accepted. But by the time that I did buy a house, I was so grateful that I had been diligently saving and I had that little stash with money.

So if saving feels a little overwhelming to you, a good way to boost your savings is to stash those little windfalls that you aren't expecting. So for me, like, if I got a bonus or a raise at work that went into the house fund. Birthday check from grandma went into the house fund. And my biggest to regret about saving for a house is not knowing about high-yield savings accounts sooner. Like, especially if time is on your side and we're talking about folks who are taking a year to prepare, having that high-yield savings account and putting your money to work for you can really make a difference. High-ield savings accounts can definitely help your money grow quicker.

And, Abby, I just want to say I'm impressed by you saving for 10 years. I think to date, the longest financial go life saved towards is retirement, and I'm still saving. So I'm sure some people may want to refinance also, but are holding out because they're waiting for better mortgage rates. Any tips for them in 2026? I know we've all been waiting for the year of refinancing, right? And for some folks, it might be a good time to refinance now, even in an elevated rates environment. It just depends on what your current rate is and what mortgage rates are doing now. So in general, our rule of thumb is that you want your new mortgage rate to be a half a percent.

percentage point to ideally like at least three quarters of a percentage point lower than your existing mortgage rate. And that's when the benefits start to outweigh those upfront fees and costs of refinancing. So if you're thinking about refinancing this year, and I know we've all been waiting for the year of refinancing, I'd start by running the numbers through a mortgage refinance calculator to see if it would be worth it for you. And it seems like nerd wallet has a calculator I've heard about every step of the home buying process. We do. Calcs for days.

Yeah. The one time that I was shopping for a house, it was so interesting to see, yeah, the price difference is when I shopped around. So that's definitely an important tip. Abby, you've given us a wealth of information. Now some people may be thinking, okay, I'm ready to start looking for a house. People usually think of spring as the best time to buy a home, but what's it like out there right now in the wintertime?

You know, buying a house in January can actually be a small. smart move. Sellers tend to be pretty motivated in the off season because, you know, they're not listing their house because they want to generally. It's because they have to. They're pretty motivated to sell, right? So there's less competition over the winter months, too. So buyers might be able to have a little more leverage to score a better price or better terms. Infantry tends to dip seasonally in the winter. So in January, you might have fewer homes to choose from. But that also means that you can take your time. Like, you're less likely to run into bidding wars or rush deadlines for offers, things like that. Another benefit to house hunting in January is that

movers and contractors tend to be available and they tend to be cheaper. So you can save some money there too. And, you know, at the end of the day, like winter can really work in your favor if you know how to work it. I can attest that moving in the summertime is very, very expensive. Do not recommend. What about home sellers, Abby? You know, on the flip side, as a seller, like, if you can wait to list till spring, it might be worth it to wait until that traditional home buying season. If you're listing your home in the spring, there's more demand. You're probably going to see a little bit more action. But, you know, if you want to sell your home this year, winter is a great time to meet with a listing agent, to tackle some of those cleaning projects, some of those repairs, and get your home ready to sell.

Great. Well, Abby, thank you so much for coming on and sharing all this with us today. Thanks. Good to be back. And that's all we have for this episode. join us next time as we continue our series about your money in 2026. We'll talk through what you need to know about credit cards this year. Follow smart money on your favorite podcast app that includes Spotify, Apple Podcasts, and IHeartRadio to automatically download new episodes.

Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes may not apply to your specific circumstances. This episode is produced by Tess Viglin and Anna Halhawski. Hillary Georgie helps with editing. Nick Khrisney mixed our audio. Thank you, thank you, and thank you to NerdWallet's editors for all their help. With that said, until next time, turn to the nerds.