Is Home Price Growth Turning Around?

For more than a year, a lot of housing headlines have focused on the chance of a price crash. But the latest data is pointing in a different direction.

Home price growth cooled for quite a while. That part is true. The rapid gains seen during the pandemic housing boom faded, mortgage rates rose, affordability got tighter, and buyers became more cautious. In many markets, prices flattened. In some, they dipped.

But cooling is not the same thing as crashing. And now, there are signs the cooldown may be losing steam.

Recent data suggests the pace of price growth may have found a floor and could be starting to pick up again. That does not mean prices are about to surge everywhere. It does mean buyers and sellers should pay close attention, because a shift in price momentum can change the best move.

This article is for informational purposes only. Real estate conditions vary by market, price point, and property type, so local guidance matters.

The latest data shows price growth may be firming up

For the past couple of years, home price growth has been slowing. According to Redfin, annual price growth cooled from around 7% in mid-2024.

That slowdown made sense. Higher mortgage rates limited what buyers could afford. Some buyers paused their search. Homes took longer to sell in many areas. Sellers had to be more realistic on price, especially if their home needed work or was priced above nearby comparable sales.

But the most recent numbers suggest that slowdown may have reached its low point.

A couple months of data is not enough to declare a long-term trend. Housing data can move around from month to month, and seasonal patterns matter. Spring and early summer often bring more activity, while late fall and winter can look softer.

Still, the direction of the recent data matters. If price growth stops slowing and starts rising again, that can mark a turning point in the market.

Think of it like a car coming down a hill. For a while, the car is still moving downhill, but if it starts slowing, then levels out, then begins climbing again, the direction has changed. Home prices may be in that leveling-out stage nationally.

That is especially important because many buyers have been waiting for a major price correction. If the market is starting to firm up instead, waiting may not deliver the savings they hoped for.

Fewer markets are seeing prices fall

One of the clearest signs of a shift is the shrinking share of markets where prices are declining.

According to ResiClub and Zillow, about 36% of the 300 largest housing markets had falling prices around the middle of last year. Since the start of this year, that share has moved lower. Now, about 23% of those markets are seeing mild price dips.

That is still a meaningful share. Nearly one in four large markets seeing some price decline is not nothing. But the trend is what stands out.

When fewer markets are seeing prices fall, more markets are either stabilizing or rising again. That points to a market that may be gaining support.

This is also a reminder that the national housing market is really a collection of local markets. A national average can say one thing, while a specific city, neighborhood, or price range tells a different story.

For example, one metro may still have too many listings at higher price points. Another may have very little inventory below the median price. One suburb may be seeing price cuts on older homes that need updates, while move-in-ready homes nearby still attract strong interest.

That is why broad headlines can mislead people.

A headline that says “prices are falling” may be true in some areas. A headline that says “prices are rising” may also be true in others. The better question is where the shift is happening, how strong it is, and whether it applies to the type of home being bought or sold.

Forecasts point to modest national gains

Forecasts are not guarantees, but they are useful when several experts point in the same general direction.

Right now, the average forecast calls for home prices to rise about 2.3% nationally this year. That is not a boom. It is also not a crash.

A 2.3% gain would be much slower than the rapid price increases seen a few years ago. But after a period of cooling, even modest growth can signal that the market is finding its footing again.

For that yearly forecast to come true, price growth would likely need to pick up somewhat in the second half of 2026. That is one reason the recent change in momentum is getting attention.

If prices were still slowing across the board, a positive annual forecast would look harder to reach. But if the slowdown has already bottomed out, modest gains become more realistic.

Several forces could support that:

• Inventory is still limited in many places

  
  

Even with more homes coming to market in some areas, the supply of available homes remains tight compared with historical norms in many communities.

• Many homeowners are still rate-locked

  
  

Owners with very low mortgage rates may be reluctant to sell and buy again at a higher rate. That keeps some potential listings off the market.

• Buyer demand has not disappeared

  
  

Higher rates pushed some buyers to the sidelines, but life events still create housing demand. People move for jobs, family changes, schools, space, retirement, and lifestyle needs.

• New construction cannot solve every shortage

  
  

Builders have added supply in some markets, especially in parts of the Sun Belt. But new construction varies widely by region and price point.

Put together, these factors help explain why prices have not fallen as sharply as some expected. Demand cooled, but supply also stayed constrained.

What this means for homebuyers

For buyers, the biggest takeaway is simple: do not assume prices will fall just because they already cooled.

A slower market can create opportunities. Buyers may face less competition than they did during the most intense years of the housing boom. Some sellers may be open to repairs, closing cost help, or a price adjustment if a home has been sitting.

But if price growth is turning back up, waiting for a dramatic discount may become risky.

That does not mean buyers should rush into a purchase. It means the decision should be based on affordability, local data, and the right home, not just a hope that prices will drop.

A buyer should focus on a few key questions:

• Can the monthly payment work comfortably with current income and expenses?

• How much inventory is available in the target area and price range?

• Are homes selling close to list price, or are price cuts common?

• How long are homes sitting before they go under contract?

• Is the property likely to meet needs for several years?

  
  

The monthly payment matters more than the headline price alone. A lower sale price does not always mean a better deal if mortgage rates move higher. By contrast, a slightly higher price can sometimes still be manageable if the financing, concessions, or timing work better.

Buyers should also watch the difference between asking prices and sold prices. Asking prices show seller expectations. Sold prices show what buyers are actually willing and able to pay.

If homes are selling quickly and close to list price, that suggests stronger demand. If price cuts are common and days on market are rising, buyers may have more negotiating room.

What this means for home sellers

For sellers, firmer price growth can be encouraging. It may mean demand is stabilizing, especially after a period when buyers had more leverage in some markets.

But this is not a return to the frenzy of the pandemic years. Many buyers are still dealing with affordability pressure. Mortgage rates, insurance costs, property taxes, and general household expenses all affect what buyers can offer.

That means pricing still matters.

A seller who overprices a home may sit on the market, then need a price cut later. That can weaken negotiating power. Buyers often wonder what is wrong with a home after it has lingered, even if the issue is simply the price.

A stronger approach is to price based on current comparable sales, not last year’s peak expectations or a neighbor’s hopeful listing price.

Sellers should pay special attention to:

• Recent closed sales

  
  

These show what buyers actually paid.

• Active competition

  
  

These homes shape how buyers compare options today.

• Pending sales

  
  

These can show where the market is heading, even before final sale prices are public.

• Condition and presentation

  
  

Buyers facing high monthly payments often become more selective. Clean, well-maintained homes usually stand out.

• Local inventory

  
  

Low inventory can support stronger pricing. More competition means sellers may need to be sharper.

If price growth is picking up, sellers may feel more confident. Still, the best results usually come from matching the market rather than chasing it.

Why a national price crash has not happened

The crash predictions were easy to understand. Home prices rose quickly, mortgage rates jumped, and affordability worsened. Many people assumed prices had to fall hard.

But housing does not move like the stock market. Prices tend to be sticky because most homeowners do not sell unless they have a reason to. If a homeowner has a low mortgage rate and strong equity, they may choose to stay put rather than accept a lower price.

That matters because supply is a major part of price direction.

A crash usually needs a sharp increase in forced selling, excess inventory, or both. That is not what most of the country has seen. Many homeowners still have significant equity. Lending standards have also been much tighter than they were before the 2008 housing crisis.

That does not make the market risk-free. Some areas can still see price declines. Markets that had rapid price gains, heavy investor activity, or a lot of new supply may face more pressure. Local job weakness can also weigh on prices.

But nationally, limited supply has helped keep prices from falling sharply.

This is why the conversation is shifting. The key question is no longer whether prices are crashing nationwide. The better question is whether the recent slowdown has run its course.

Local conditions still matter most

National trends are useful, but local numbers should shape real decisions.

A 2.3% national price forecast does not mean every home will gain 2.3%. Some markets may rise faster. Some may stay flat. Some may decline. Even within one metro area, entry-level homes can behave differently from luxury homes.

Price point matters too. In many areas, the most affordable homes attract the strongest demand because that is where the largest pool of buyers is looking. Higher-end homes may take longer to sell because the buyer pool is smaller.

Property condition can create another split. A move-in-ready home with updated systems may sell quickly. A home that needs major repairs may require a discount, especially when buyers already feel stretched.

For buyers and sellers, the best read on the market comes from recent, nearby activity. Look at homes that are similar in size, condition, location, and style. A sale from six months ago may not reflect today’s buyer behavior.

The market is changing, but it is not changing evenly.

The bottom line

Home price growth slowed, but the latest data suggests it may be starting to turn around. Fewer large markets are seeing price declines, and national forecasts point to modest gains rather than a broad crash.

For buyers, that means waiting for a major drop may not be the best plan if the right home and payment are available now. For sellers, it means conditions may be improving, but smart pricing still matters.

The housing market is not roaring back everywhere. It is also not falling apart nationally. The more likely story is a market that cooled, stabilized, and may now be gaining some momentum again.

The best next step is to look past the headlines and study what is happening in the specific market, neighborhood, and price range that matters. That is where the real answer is.