A significant shift is on the horizon for the American property market, with new data predicting home price declines in nearly a quarter of the nation's largest urban areas next year. This marks a notable departure from the soaring values that have characterised the post-pandemic era and locked many potential buyers out of the market.
Regional Hotspots Braced for Downturn
According to the 2026 Realtor.com forecast, 22 of America’s 100 largest metropolitan areas are expected to see property values diminish. The corrections are concentrated in regions that experienced explosive growth during the pandemic, particularly the Southeast and West, where prices raced far ahead of local income levels.
Florida emerges as a focal point of the downturn. Seven of the state's eight largest cities are projected to see price dips, with only Miami bucking the trend with a modest 1.1 percent increase. The most severe decline is forecast for the Fort Lauderdale area, where prices are anticipated to fall by a substantial 10.2 percent. This is followed closely by the North Port-Sarasota-Bradenton region, with a projected 8.9 percent drop.
On the West Coast, the areas of Sacramento and Stockton in California are set for declines. In a surprising turn, San Francisco—long synonymous with extortionate housing costs—is also predicted to see a 2.5 percent decrease. Elsewhere, Arizona's major hubs of Phoenix and Tucson are looking at dips of 2.3 and 0.5 percent respectively, with other declines noted in parts of Colorado, Washington, Idaho, Iowa, and southern cities like Atlanta and Raleigh.
Understanding the Market Correction
Senior economist at Realtor.com, Jake Krimmel, attributes these changes to a rebalancing of supply and demand. "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," Krimmel told CBS News. A key factor is the increased availability of properties in these areas, which is finally granting buyers more choice and negotiating power after years of intense competition.
This projected shift for 2026 contrasts sharply with the dynamics of 2025. While an increase in listings has forced sellers to cut prices or delist properties at record levels this year, buyers have simultaneously been grappling with persistently high mortgage rates and elevated prices. As of October 2025, the national median sale price stood near $440,000, a 1.3 percent annual rise, while the average 30-year fixed mortgage rate was projected at 6.6 percent for the year.
Broader Implications and a Silver Lining
Falling property values are not purely good news for aspiring homeowners. They can signal underlying economic strains, including weakening demand, rising financial stress, or tightening credit conditions, all of which undermine confidence in the housing market. Given that housing wealth significantly influences consumer spending and construction employment, sharp price declines can create ripple effects throughout the broader economy, potentially slowing growth and elevating recession risks.
However, the 2026 forecast does contain some positive indicators for buyers. Mortgage rates are predicted to dip subtly to around 6.3 percent. Furthermore, while 22 major metros face declines, prices in the other 78 largest US cities are still projected to rise, albeit at a more modest median rate of about 4 percent. This suggests a move towards a more balanced and sustainable market, rather than a nationwide crash, offering a glimmer of hope for those who have been waiting on the sidelines.
