The housing market in the U.S. is expected to shift in favor of buyers next year as home prices are forecasted to decline in 22 of the largest 100 cities. Realtor.com’s new analysis reveals that property values will soften, especially in regions with expanded inventory and easing demand.
Mortgage rates, which have hovered above 6%, are projected to dip slightly to around 6.3%. This, combined with continued wage growth, could encourage more potential buyers to enter the market, signaling a more balanced environment between sellers and buyers. According to Jake Krimmel, senior economist at Realtor.com, “2026 is going to be a year where we think the market is going to steady” and “show signs of getting back on track to what we consider to be normal.”
The largest home price declines are expected mostly in the Southeast and West. Florida dominates the list, with seven of its eight largest cities forecasted to experience drops. Cape Coral-Fort Lauderdale leads with an anticipated 10.2% fall in prices. North Port-Sarasota-Bradenton follows with an 8.9% decline. These areas previously saw surges fueled by low mortgage rates and remote work trends during the pandemic, but demand is now cooling.
Other cities facing price dips have seen rising housing inventories, easing competition among buyers. Realtor.com’s assessment considered factors such as new construction, wage and job growth, unemployment, and past price trends across the top 100 metro areas.
Meanwhile, the remaining 78 largest cities are expected to see modest price increases, with a median rise of about 4%. Existing-home sales are forecasted to grow slightly to just over 4.1 million units, marking a slow recovery from this year’s relatively flat activity. Zillow also projects an uptick in sales, reaching nearly 4.3 million, with mortgage rates staying slightly above 6%, still more affordable compared to prior decades.
This evolving market dynamic indicates a potential easing after years of rapid price growth and tight buyer conditions. Homebuyers may find more choices and improved negotiating power, particularly in cities with declining prices. However, overall price growth will remain modest across most major U.S. metropolitan areas, reflecting a gradual return to a balanced housing market.
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