Forecast: Home Prices to Decline in 22 U.S. Cities Next Year

Market Shifts on the Horizon

The housing market has been a challenging landscape lately, with soaring home prices and high mortgage rates making it tough for many to break in. However, according to a recent report from Realtor.com, 2026 could usher in positive changes for prospective buyers, as home prices are projected to dip in 22 of the largest 100 U.S. cities.

As we look ahead, current market trends suggest that we may finally see a shift towards a more balanced environment—one that neither favors sellers nor buyers, a welcomed relief after the frenzy of recent years. Senior economist Jake Krimmel of Realtor.com has pointed out that we are likely to see the most "buyer-friendly" market conditions in years.

"2026 is going to be a year where we think the market is going to steady… It's going to show a lot of signs of getting back on track to what we consider to be normal," says Krimmel.

Mortgage rates are anticipated to clue into this trend as well, expected to decrease slightly to an average of 6.3%, offering would-be buyers a bit of breathing room compared to this year's average of 6.6%. This dip, along with anticipated wage growth, could prompt more buyers to enter the housing market.

Projecting Sales and Inventory

Overall, existing-home sales are predicted to increase minimally, climbing to approximately 4.13 million homes in 2026. While this marks only a slight gain from this year's forecast of 4.07 million, it's significant given the relative stagnation of transactions throughout 2025.

Where Will Prices Drop?

Most notably, the review identified a cluster of cities in the Southeast and the West where prices are expected to fall. The Cape Coral-Fort Lauderdale metropolitan area is anticipated to lead the charge, with a staggering predicted decline of 10.2%. Following closely are the North Port-Sarasota-Bradenton region, with an 8.9% drop in home values.

This trend can be largely attributed to increasing inventory levels, which is providing buyers with more options. Some areas that once experienced booms during the COVID-19 pandemic are now witnessing a moderation in demand.

Krimmel notes, "These places, among others, saw a huge frenzy during the pandemic, so part of what we are projecting is that demand continuing to come back down to earth."

Other cities seeing predicted price declines include several in Florida, with seven out of the eight largest cities in the state projected to experience price reductions, Miami being the lone exception. In contrast, the remaining 78 cities examined are expected to see modest increases in home values, averaging around a 4% gain.

Conclusion

These projections not only paint a hopeful picture for potential homebuyers but also signal a shift towards a more sustainable housing market. As we move into 2026, understanding these trends will be crucial for stakeholders, from buyers and sellers to policymakers aiming to foster economic stability in the housing sector.

As always, I will continue to keep a close watch on these developments and provide you with insights that connect these market shifts to larger economic patterns.