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Will Home Prices Come Down? What the Data Actually Shows
National existing home price growth slowed to ~1-2% in 2025 (NAR). Some markets declined: San Francisco -down, Denver -3.2%, Phoenix -2.3%, Miami -4.3% (Zillow 2025). Others grew: Chicago +4%, Milwaukee +4.8%, Detroit +2.8%. A major national crash requires forced selling at scale (2008 required foreclosure wave) — which current mortgage profiles (fixed rates, low defaults) do not support. Affordability is slowly improving as inventory rises 13% YoY. Own Luxury Homes® 12-Point Agent Integrity Audit™.
Will Home Prices Come Down? What the Data Actually Shows
Home prices nationally have plateaued, with modest growth in some markets and modest declines in others. The 50% surge from 2019 to 2024 has slowed dramatically. But a major national price correction — the kind that would meaningfully restore affordability broadly — would require conditions that do not currently exist.
What the 2025-2026 Data Shows
National existing home price growth slowed to approximately 1–2% year-over-year in 2025 (NAR data). The national median sits near $400,000–$420,000 with seasonal variation. Diverging markets: some markets with overbuilt supply or weakening demand saw price declines. Miami fell 4.3% year-over-year, Denver dropped 3.2%, and Phoenix declined 2.3%. Meanwhile, relatively affordable Midwest markets continued appreciating: Chicago +4.0%, Milwaukee +4.8%, Detroit +2.8%. The national average masks significant local variation.
Why a Major National Crash Is Unlikely
Home price crashes of 20%+ require forced selling at scale: foreclosures, mass defaults, or oversupply requiring distressed liquidation. The 2008 crash was driven by millions of adjustable-rate, low-documentation loans that reset upward as teaser periods expired, triggering mass defaults and a foreclosure wave that created millions of distressed sales competing with each other. Today’s mortgage market looks very different. Most homeowners hold 30-year fixed-rate mortgages at payments they can sustain. Loan origination standards are tighter. Delinquency rates remain low. Without forced selling at scale, prices do not collapse — they plateau.
When Prices Might Soften More Meaningfully
Markets most likely to see continued price softening: high-cost coastal cities with population outmigration, markets that saw extreme pandemic-era price spikes without underlying economic fundamentals to support them (some Mountain West and Sun Belt metros), and markets where new supply construction is outpacing demand absorption. Factors that could produce a broader correction: a sharp recession causing significant job losses, a significant increase in mortgage delinquencies, or a forced liquidation of institutional investor portfolios. None of these are the current base case.
“When a buyer asks me "should I wait for prices to come down?" I tell them I do not know when or how much prices will move, and neither does anyone else with certainty. What I do know is that waiting for a crash that may not come has a cost: every year of renting is equity not built, appreciation not captured, and a payment that rises with inflation rather than staying fixed. The buyers who built the most wealth over the last 20 years are the ones who bought when the numbers worked for their situation, not the ones who waited for a perfect price. That observation holds even accounting for 2008.”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
Will housing prices drop in 2026?
National housing price growth slowed to approximately 1–2% in 2025. Some markets saw modest price declines (Miami -4.3%, Denver -3.2%, Phoenix -2.3% in 2025) while others continued growing (Chicago +4%, Midwest markets generally positive). A major national price correction requires forced selling at scale (like the 2008 foreclosure wave), which current market conditions (fixed-rate mortgages, low defaults) do not support. Most economists expect a range from flat to modest appreciation nationally, with significant market-by-market variation.
What would cause a housing market crash?
Major home price crashes historically require: (1) mass forced selling from loan defaults, foreclosures, or overleveraged investors needing to liquidate; (2) significant oversupply relative to demand; (3) severe economic recession causing mass unemployment and inability to service mortgages. The 2008 crash required all three. Current conditions show: fixed-rate mortgages at sustainable payments (low default risk), modest inventory increases (not severe oversupply), and low unemployment. Without a significant economic shock, a crash matching 2008 is unlikely in most markets.
Own Luxury Homes® — we work within the market as it is, not as it should be. 12-Point Agent Integrity Audit™. Talk to a specialist ›
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)