Key Takeaways
- Lancaster County remains a seller’s market — ranked #5 nationally on Realtor.com’s Hotness Index, with homes selling in a median of 46 days (Realtor.com).
- Nationally, active listings rose 7.9% year over year — the 28th straight month of inventory gains — but the Northeast (where we sit) is still 54.9% below pre-pandemic norms (Realtor.com February 2026 data).
- A record 6% of workers tapped their 401(k) for a hardship withdrawal in 2025 — up from 2% pre-pandemic. The top reasons: avoiding foreclosure and eviction (WSJ).
- The K-shaped economy is showing up everywhere — from luxury hotel demand to grocery aisles. The middle is getting squeezed. What does that mean for housing? Read on.
A Tale of Two Real Estate Markets
Nationally, according to Realtor.com‘s February 2026 data, inventory is still rising but momentum is softening. Homes sat on the market 4 days longer than last year, with the typical home spending 70 days on market. The national median list price fell 2.1% year over year to $403,450. The Northeast and Midwest — where Lancaster sits — continue to tell a very different story than the South and West.
Lancaster County, February 2026
Here’s how our local market compares using Realtor.com‘s Lancaster County data vs. Redfin’s national statistics and Realtor.com’s weekly national report:
Median Home Price
National: $423,029 (+1.1% year over year)
Lancaster: $374,900 (+4.14% year over year)
Median Days on Market
National: 66 days (+7 year over year)
Lancaster: 41 days (-5.88% year over year) 🔥
Active Inventory
National (Northeast): +3.8% year over year — still 54.9% below pre-pandemic levels
Lancaster: +0.54% year over year — tight supply remains the dominant story
What does this mean for Lancaster?
Lancaster is holding strong. Homes are selling faster here than they were a year ago, prices are rising at a healthy clip, and inventory remains constrained. The Realtor.com Hotness Index ranks Lancaster County #10 in the nation — that’s not an accident. Buyers need to come prepared. Offers still need to be competitive.
At Mortgage Craft, we’re helping buyers get pre-qualified quickly so they can move when the right home hits the market. If you have buyers who aren’t yet pre-qualified, now is the time.
The K-Shaped Economy — and What It Means for Housing
You’ve probably heard the term “K-shaped recovery.” It describes an economy where higher-income households are doing well while middle- and lower-income households fall further behind. We’re now seeing this pattern show up in nearly every corner of the economy — and it has direct implications for real estate.
In grocery stores: Food giants like General Mills have warned of “significant consumer stress, especially for the middle and lower income groups” due to inflation and reduced food stamp benefits. Lower-income consumers are shopping “basket to basket or even meal to meal.” Meanwhile, higher earners are buying in bulk when sales hit. Two completely different financial realities — same checkout line.
In hotels: Luxury hotel revenue per available room was up 9% in mid-February year over year, while economy hotels saw revenue fall. Wealthy Americans — boosted by record stock portfolios — are spending freely. Foreign tourists are not showing up (Canada -16.7%, European visitors -3.4%, Asian visitors -11.7%). The economy is running on a narrow base.
In retirement accounts: A record 6% of workers withdrew from their 401(k) for a hardship in 2025 — the sixth straight year of increases. The top reasons were avoiding foreclosure and eviction and paying medical bills. The median withdrawal was just $1,900. At the same time, average 401(k) balances hit a record high of $167,970. A small segment is struggling while the broader picture looks fine on paper.
What does this mean for buyers?
The buyers who are struggling financially are going to have a harder time qualifying for a mortgage. Rising hardship withdrawals, food inflation, and a squeezed middle class mean fewer qualified buyers in the pool. If you’re in a position to buy, that’s actually a relative advantage right now. But financial health matters more than ever. We’re seeing it firsthand when we pull credit — more delinquencies are showing up and knocking buyers out of qualifying.
If you have clients who are preparing for a home purchase, the message is clear: protect your credit, pay your bills on time, and don’t tap retirement savings unless absolutely necessary (it can affect mortgage qualification and create a tax burden).
What does this mean for sellers?
A shrinking qualified buyer pool is a slow-moving headwind for sellers. Lancaster hasn’t felt this yet — demand here remains strong. But if the economic divide widens further, it will eventually show up in less buyer competition and longer days on market. Sellers who price right and present well will still win. Those who overprice may feel it sooner than expected.
What’s Moving Interest Rates This Week
Mortgage rates have been one of the biggest positive surprises of early 2026. Rates briefly dipped below 6% by the end of February — the lowest since fall 2022 — and pending home sales jumped 4.2% year over year nationally as a result. That’s a 15-month high in contract activity. Lower rates are bringing buyers off the sidelines.
U.S. unemployment on Friday will be the key market mover.
