2026 on the Horizon: Resilient Consumers, Cooling Jobs, and New Housing Policy Debates
As 2025 came to a close, the U.S. economy sent mixed but telling signals. Consumers continued to spend through the holidays—especially online—yet rising credit use and softening job growth suggest some caution ahead. The labor market cooled further, housing policy proposals grabbed headlines, and consumer confidence weakened as uncertainty about jobs and affordability grew. For Southern California homeowners and buyers, these crosscurrents set the stage for what could be another dynamic year in 2026.
Holiday Spending Holds Up—for Now
Holiday spending rose at a moderate pace in 2025, reflecting consumer resilience late in the year. According to Visa, U.S. retail spending increased 4.2% year-over-year during the seven-week holiday period starting November 1.
Electronics led all categories with a 5.8% increase, followed closely by apparel and accessories (+5.3%). In contrast, the home improvement sector lagged, with furniture and home furnishings barely rising (+0.8%) and building materials and garden equipment declining 1%.
A growing share of purchases were funded through credit cards and buy-now-pay-later programs. As a result, rising consumer debt could lead to a pullback in spending during early 2026, especially if economic conditions soften further.
Soft December Job Growth Caps a Weak Hiring Year
The labor market ended 2025 on a subdued note. Nonfarm payrolls increased by just 50,000 jobs in December, falling short of expectations and marking a slowdown from already weak prior months.
- October and November job gains were revised downward by a combined 76,000 jobs
- The three-month average job growth turned negative, signaling broader cooling
For all of 2025, the U.S. added just 584,000 jobs, making it the weakest hiring year since 2020. Some relief came from wages and unemployment:
- Unemployment ticked down to 4.4%
- Average hourly earnings rose 3.8% year-over-year, beating expectations
Overall, the labor market continues to cool—but signs point to a gradual, orderly slowdown, not a sharp downturn.
Mortgage Rates Dip After GSE Bond Purchase Proposal
Housing affordability returned to the spotlight after President Trump announced plans to direct Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, with the goal of lowering borrowing costs.
Markets reacted quickly - The average 30-year fixed mortgage rate dipped to around 6%, its lowest level since early 2023
While the initial market response may prove somewhat overdone—given the mortgage-backed securities market exceeds $11 trillion—even a modest, sustained decline in rates would be meaningful. Lower borrowing costs could help unlock pent-up demand among buyers who have been sidelined by affordability challenges.
Proposed Ban on Institutional Homebuyers Sparks Debate
Another headline-grabbing proposal involved a potential ban on large Wall Street investors purchasing single-family homes. While details remain limited, the announcement renewed discussion around housing affordability and supply.
Institutional investors currently represent a relatively small share of total home purchases, and industry groups argue that restricting buyers alone may not meaningfully lower prices. The National Association of REALTORS® emphasized a broader approach—encouraging institutional owners to sell to owner-occupants and prioritizing policies that expand housing supply and support first-time buyers.
🔦 Local Spotlight: Long Beach & Orange County
Long Beach
- Holiday-season demand remained steady despite rate volatility
- Entry-level homes and condos continue to attract buyers, particularly with any rate relief
- Neighborhoods like Belmont Shore, East Long Beach, and Bixby Knolls remain supply-constrained
- Softer job growth reinforces the importance of realistic pricing for sellers heading into 2026
Orange County
- Strong consumer spending among higher-income households continues to support housing demand
- Markets such as Irvine, Costa Mesa, Newport Beach, and Huntington Beach remain resilient
- Luxury buyers are less impacted by short-term economic shifts, while affordability remains a challenge for first-time buyers
- Any sustained dip in mortgage rates could drive renewed early-2026 activity
Bottom Line
As we head into 2026, the economy—and housing market—appears resilient but cautious. Consumers are still spending, jobs are still being added, and housing policy remains front and center. However, rising debt, soft hiring, and affordability pressures suggest a more selective and strategic real estate environment ahead.
📩 If you’re thinking about buying or selling in the year ahead, understanding how these national trends intersect with local neighborhood dynamics will be key. Let’s talk about what this means for your next move.
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133 The Promenade N #319
Long Beach, CA 90802
1 Bed | 1 Bath | 910 SF | $485,000
Modern cosmopolitan condo on The Promenade. Well designed open floor plan. Gorgeous kitchen featuring CaesarStone counters and stainless steal appliances. Living room balcony with views of the lovely courtyard and palm trees. Large primary bedroom with dual closets. Central forced air and AC. Washer and dryer included. FIOS Internet, basic cable & water included in HOA dues. Building offers a modern club room complete w/ TV, sofas, pool table, shuffle board, full kitchen, outdoor social patio bar, courtyard lounge area w/ fireplace, modern fitness center w/ TVs & yoga room. Living in this desirable community you are walking distance to the City of Long Beach Bike Paths, The Promenade, boardwalk, grocery stores, The Pike, the beach, marina, Shoreline Village, jet ski & boat rentals, paddle boarding, Farmers Market, Pine Ave., live music, and all the amazing sites and entertainment downtown has to offer!
OPEN HOUSE
Saturday (1/17)
12:00 - 3:00 pm
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13616 Cornuta Ave.
Bellflower, CA 90706
4 Bed | 1.5 Bath | 1,231 SF | $797,000
Welcome to this charming and spacious 4 bedroom, 1.5 bath home located in one of Bellflower’s most desirable neighborhoods, served by the acclaimed Downey school district. This well-maintained residence features a nicely updated kitchen complete with Corian countertops, a custom tile backsplash, and solid wood cabinetry. The home offers wonderful indoor–outdoor living, with an attached 2-car garage, a long driveway that can easily accommodate up to three additional cars, and a generous backyard with a covered patio ideal for relaxing, entertaining, or play. Located on a quiet street with wide roads and a true neighborhood feel, this home is close to top-rated schools, local parks, great dining, and shopping. Commuters will appreciate easy access to the 105, 91, and 605 freeways, providing quick connections to both Los Angeles and Orange County. Just minutes from St. John Bosco High School, this home blends comfort, convenience, and an unbeatable location—ready for its next owner to enjoy. Some lenders may offer special financing incentives, including down payment assistance or grants, subject to lender availability and buyer qualifications.
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7428 Bothwell Rd.
Reseda, CA 91335
5 Bed | 3 Bath | 2,420 SF | $810,000
Discover an exceptional opportunity in the heart of Reseda! This spacious 5-bedroom, 3-bath home offers approximately 2,420 sq. ft. of living space on a 5,388 sq. ft. lot, presenting the perfect blank canvas for investors, contractors, or buyers seeking a full renovation project. The home features a desirable two-story layout with generous living areas and excellent natural light potential. A main-level bedroom and full bath offer flexibility for multi-generational living, a convenient in-law suite, guest room, or a home office setup. Three spacious bedrooms upstairs with primary on-suite, walk in closet and extra shared full bathroom. With creativity and vision, this property can be transformed into a modern family retreat or a profitable investment. Located on a quiet residential street, just minutes from schools, parks, restaurants, and freeway access, this property combines a prime location with unlimited potential. Property is being sold in as-is condition with no repairs or credits. Bring your contractor and imagination to realize this home’s full potential.
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4700 Clair Del Ave #620
Long Beach, CA 90807
2 Bed | 1 Bath | 779 SF | $377,000
Top-Floor Condo with Pool Views and Garage Parking! Welcome to this nicely updated 2-bedroom, 1-bath top-floor corner condo, offering abundant natural light and serene views of the sparkling pool and spa. Inside, you’ll find a spacious living area with newer dual-pane windows and modern laminate flooring. The open kitchen features white cabinetry, granite counters with a stylish tile backsplash, and gas range — perfect for cooking and entertaining. This home includes two dedicated parking spaces, one in a private garage and another reserved spot. The Clair Del community offers fantastic amenities including a pool, spa, barbecue area, two community rooms (one with a pool table and ping pong, and another available for private gatherings), plus two laundry facilities. With low HOA dues that cover water, trash, gas, and community upkeep, this is an excellent opportunity for convenient and affordable living.
Ideally located near Lakewood Country Club, Bixby Knolls, and the Long Beach Exchange (LBX), you’ll enjoy easy access to shopping, dining, and entertainment.
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1849 Fanwood Ave.
Long Beach, CA 90815
3 Bed | 1 Bath | 1,054 SF | $900,000
Charming Remodeled Home in Highly Desirable Los Altos! Welcome to this beautifully updated 3-bedroom home, perfectly situated on a picturesque tree-lined street in one of Long Beach’s most sought-after neighborhoods. Just two blocks from the award-winning Minnie Gant Elementary School and one block from Cal State Long Beach, this home offers both charm and convenience in an unbeatable location. Step inside to find a bright and inviting interior featuring a stunning remodeled kitchen with sleek white soft-close cabinetry, granite countertops, new modern flooring, and stainless-steel appliances, including a 5-burner gas range. The updated bathroom shines with a stylish vanity and contemporary finishes. Additional highlights include dual-pane windows, modern ceiling fans in every bedroom, and original hardwood floors throughout the living areas and bedrooms.
Situated on an expansive 6,828 sq. ft. lot, the backyard offers exceptional space and privacy—perfect for entertaining, gardening, or even adding an ADU. A long driveway provides ample parking, with room for a boat or RV, plus a detached 2-car garage. Conveniently located near parks, shopping, Trader Joe’s, and major freeways, this Los Altos gem combines modern updates with classic charm in a prime location!
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4340 Pixie Ave.
Lakewood, CA 90712
5 Bed | 3 Bath | 2,459 SF | $1,175,000
Beautifully updated 5-bedroom, 3-bath home on a tree lined street in the sought-after Lakewood Mutuals neighborhood! Step inside to find new modern flooring, fresh interior and exterior paint, smooth ceilings, and custom wood shutters that add timeless charm. The open layout features a welcoming living room, a large dining area, and a bright kitchen with white cabinetry, new quartz countertops, and stainless steel appliances. The main level includes three bedrooms and two full baths, including a spacious primary suite with three closets (one walk-in) and a spa-like bath with dual sinks, walk-in shower, and jetted tub. Upstairs, two additional bedrooms and a full bath with walk-in shower provide flexible living space. The backyard is a private oasis with pavers that match seamlessly with the driveway making an expansive area that is perfect for entertaining day or night with ambient lighting, turf play area, or relaxing in the swim spa under the stars. Additional features include central heat and A/C, indoor laundry, and parking for up to 6 cars with a detached 2-car garage and long driveway.
Close to Lakewood Country Club, Bixby Knolls, and Long Beach Exchange (LBX), this home offers both tranquility and prime access to shopping, dining, and entertainment.
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179 Santa Ana Ave.
Long Beach, CA 90803
3 Bed | 3 Bath | 3308 SF | $1,937,000
Modern Coastal Luxury in the Heart of Belmont Shore!
Prepare to be impressed by this stunning 3-bedroom, 3-bath, four-story contemporary home offering over 3,300 sq ft of sleek, modern living. Located just steps from the best of Belmont Shore, this light-filled residence features an open-concept living area with hardwood floors, a gourmet kitchen with quartz island and stainless steel appliances, and multiple balconies to enjoy the ocean breeze. The luxurious primary suite boasts a double-sided fireplace, spa-like bath with soaking tub, and a custom walk-in closet. Additional highlights include a ground-level entertaining space with bar, private loft, laundry room, solar panels, and a two-car garage with extra parking. Thoughtfully designed for comfort, style, and coastal living, this is a rare opportunity you don’t want to miss!
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