Are Home Prices Going to Drop in 2026?

If home prices were really going to come down, wouldn’t we be seeing it clearly by now?

Mortgage rates have been higher for quite a while. Inventory has improved in some areas, and buyers aren’t bidding the way they were two or three years ago. Because of that, a lot of people are thinking this has to be the year prices finally fall. But when you step back from the noise and actually look at the numbers, the situation isn’t quite that simple.

Yes, the market has shifted and things have cooled from the frenzy we experienced, but cooling off and prices coming down are two very different things.

What the national data actually shows. National housing data still shows prices slightly higher than a year ago. The Federal Housing Finance Agency’s House Price Index continues to show year-over-year gains. Zillow’s Home Value Index also shows modest growth, and Redfin’s 2026 housing forecast is projecting about 1% price growth nationally this year. That is much slower than the rapid appreciation we saw during the pandemic, but it is still growth. When people talk about a housing correction or crash, they are usually imagining broad price declines across the country, and that simply is not what the data is showing right now.

Why it feels like prices should be falling. Mainly because affordability is tight. Mortgage rates are higher, monthly payments are larger, and buyers are more cautious. But higher rates also locked many homeowners into very low mortgage rates from a few years ago. A lot of people are sitting on 3% mortgages, and moving today would mean jumping to 6 or 7%. Because of that, fewer homeowners are willing to sell, which has kept inventory from rising as much as many people expected. When supply stays relatively tight, even softer demand is not always enough to push prices down significantly.

What this means for buyers and sellers. What we are seeing is a more balanced market. Buyers are more careful and sellers are more realistic, but neither side is desperate. And markets typically do not crash when both sides remain relatively stable. For buyers, that means you may not see a dramatic drop in prices, but you may see less competition, more choices, and more room to negotiate. For sellers, it means pricing strategy and presentation matter much more than they did a few years ago. Homes that are well-prepared and priced realistically are still selling at stable values.

So are home prices finally coming down in 2026? Nationally, the data says no. The rapid run-up we experienced a few years ago has leveled off, but broad price declines are just not showing up in the national numbers.

And remember, real estate is always local. What is happening across the country can look very different from what is happening here in Portland. If you are wondering what this means for your home’s value or your buying power, reach out at 503-997-4169, email troy@nwrealtysource.com, or visit nwrealtysource.com and we can take a closer look at your specific market and build a plan that makes sense for you.