economy

December 31, 2025

What to expect from the housing market in 2026—and the 10 major cities where prices could fall the most

Home prices and mortgage rates will remain elevated in 2026, but slower price growth and more supply in some markets will give buyers more room to negotiate.

What to expect from the housing market in 2026—and the 10 major cities where prices could fall the most

TL;DR

  • The housing market is projected to undergo a "reset" in 2026, with improved conditions for buyers.
  • Increased home inventory is a key driver of this shift, after years of limited supply.
  • While overall home prices are expected to rise slowly, some markets may experience flat or declining prices.
  • Builders are increasingly offering discounts and incentives, especially for quick move-in inventory.
  • Mortgage rates are expected to remain above 6% in 2026, continuing to affect buyer affordability.
  • Specific metropolitan areas, particularly in Florida, California, Washington, and Colorado, are predicted to see price declines.
  • The market is described as transitional, with more selection and negotiating power for buyers compared to the post-pandemic period.

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