Where Home Prices Are Falling in 2026: The Local-Market Correction Gets Patchier

The big shift: housing is becoming more local again

Spring 2026 is shaping up as a “patchwork” market: some areas are still managing modest gains, while a growing set of metros and counties are seeing year-over-year price declines. The common thread is simple—where listings have piled up faster than buyers can (or want to) absorb them at current monthly payments, prices are doing the adjustment work.

Supply is winning in some metros: the seller–buyer mismatch

Redfin’s latest read shows the imbalance has widened to a record: in February there were 46.3% more sellers than buyers, a gap of 629,808 people, the largest in Redfin’s records going back to 2013. Buyers have technically had the advantage since May 2024 by Redfin’s definition (more than 10% more sellers than buyers). [fortune.com]

That leverage is showing up in behavior, not just headlines. The same reporting notes a record-high share of February deals that fell apart (13.7% of homes that went under contract), a sign that shoppers are either finding better options, negotiating harder after inspections, or backing away when numbers don’t pencil. [fortune.com]

What the price maps show: more markets in year-over-year decline

When you zoom out from anecdotes and look at consistent index tracking, the softening becomes clearer. ResiClub’s analysis of the Zillow Home Value Index (ZHVI) puts national home prices up only +0.4% year over year between January 2025 and January 2026—down from +2.1% a year earlier. The same work finds 99 of the nation’s 300 largest housing markets posted year-over-year price declines in the Feb. 2025 to Feb. 2026 window, and that this count has stabilized over the last several months rather than continuing to climb. [resiclubanalytics.com]

Fast Company’s write-up of the same mapping framework highlights the regional pattern: many of the softest markets are in parts of the Sun Belt where inventory has moved above pre-pandemic 2019 levels, while tighter-inventory pockets in the Northeast and Midwest have held up better. [fastcompany.com]

At the county level, Realtor.com’s list-price snapshots show how dramatic the declines can look in specific high-priced or second-home-heavy counties. For example, Dukes County, Massachusetts shows a median listing price of $2,277,500 in February 2026 versus $2,550,000 in February 2025 (a $272,500 drop, -10.7%). Custer County, Idaho shows $330,000 versus $592,500 (a $262,500 drop, -44.3%). [realtor.com]

Rates and listings: buyers get more options, but payments still bite

Even in markets where prices are softening, affordability can worsen if rates rise faster than prices fall. Realtor.com’s Weekly Housing Trends report for the week ending March 26 notes increasing inventory and lower home prices alongside higher mortgage rates. Freddie Mac’s weekly average 30-year fixed rate was 6.38% for the week ending March 26, up from 6.22% the prior week. Realtor.com also reports inventory up 7.8% year to date, and that the national median list price was down 1.9% year over year—its 22nd consecutive week of flat or negative growth. [realtor.com]

The takeaway for buyers: selection is improving, and negotiation is getting easier in the most oversupplied pockets. The takeaway for sellers: pricing to the market (and being open to concessions) matters more than it did in the last few years.

How to read your own market (without overreacting)

Because the correction is uneven, it’s worth using a simple local checklist before drawing big conclusions:

• **Inventory vs. 2019**: markets that rebuilt supply above 2019 tend to see faster price normalization.
• **Days on market and price cuts**: these often change before the headline median does.
• **Deal fallout and concessions**: higher cancellation rates can signal buyer leverage and inspection renegotiations.
• **County mix**: vacation-home and luxury counties can swing more dramatically than starter-home neighborhoods.

In short, spring 2026 looks less like a single national market and more like a set of micro-markets—and the direction of prices depends on how quickly supply and demand are rebalancing in each one. [resiclubanalytics.com]