2026 Housing Outlook: Why At Least 22 U.S. Cities May See Home Prices Fall Even as the Nation Edges Higher

National 2026 housing baseline: a slow thaw, not a boom

A cluster of new forecasts released in early December 2025 paints a cautiously improving picture for the 2026 U.S. housing market. Realtor.com’s 2026 Housing Forecast expects existing-home sales to rise about 1.7% next year, to just over 4.1 million transactions, after one of the slowest sales periods in roughly three decades.[realtor.com] That’s an improvement, but still well below the 5–6 million sales pace common before 2020.

On prices, the same outlook calls for national home values to increase about 2.2% in 2026, following a roughly 2.0% gain in 2025.[realtor.com] This is a far cry from the double-digit appreciation seen earlier in the decade, but importantly, it points to continued national growth rather than a broad-based price collapse.

Mortgage costs are expected to remain a key constraint. Realtor.com and other analysts anticipate 30-year fixed rates hovering in the low-6% range in 2026, clustered roughly between 6.1% and 6.4%.[ts2.tech] That’s a modest improvement from an estimated 6.6% average in 2025 but still high compared with 2010s norms.

Because overall inflation is projected to run slightly faster than home prices, real (inflation-adjusted) home values are expected to decline slightly for a second straight year.[realtor.com] For households, that means purchasing power should improve a bit even if nominal prices don’t fall in most places. Realtor.com estimates that the monthly payment on a typical home will fall to around 29.3% of median income in 2026, dipping below the 30% threshold that many economists view as a rough affordability red line.[mansionglobal.com]

Where and why prices are projected to fall

National averages, however, hide substantial local variation. A CBS News summary of the new forecasts highlights at least 22 U.S. cities where home prices are projected to decline in 2026, even as the national index rises.[cbsnews.com][cbsnews.com] A separate synthesis of the day’s reports describes 2026 as a “reset year, not a rebound,” especially for metros that overheated in 2020–2022.[cbsnews.com]

While the exact city list varies by model, the at-risk markets tend to share several features:

• Stretched affordability. Home prices in these metros climbed much faster than local incomes, leaving price-to-income ratios uncomfortably high. Even with slightly lower mortgage rates, many local buyers simply can’t support 2022-style valuations.
• Pandemic-era run-ups. Many of the flagged cities were big winners of remote-work migration, seeing double-digit annual price gains as out-of-town buyers bid aggressively. That demand has cooled, and in some cases reversed, leaving prices vulnerable.
• Rising inventory. After several years of ultra-tight supply, more owners in these areas are listing homes as they adjust to the new rate environment or cash out equity. Realtor.com expects inventory to improve modestly nationwide, and those gains are likely to be most visible in formerly starved markets.[realtor.com]

In this context, a projected price decline of a few percentage points in 2026 is better understood as local air coming out of the balloon than as a systemic collapse. For households shopping in these metros, the combination of slightly easier mortgage rates, more options, and softer list-to-sale price ratios could make homeownership more attainable than it has been in several years.

Boise as a case study in a localized correction

Boise illustrates how these dynamics play out on the ground. A local report on the new forecasts notes that Boise-area home prices could dip in 2026, even as rents remain elevated and affordability is still a major concern.[boisedev.com] The analysis leans on national projections but emphasizes the metro’s unique mix of rapid price growth, strong in-migration earlier in the decade, and a recent cooling as buyers hit their affordability limits.

During the pandemic period, Boise became a poster child for out-of-state demand, with buyers from higher-cost regions bidding up prices far beyond what long-time residents were used to paying. That surge pushed local price-to-income ratios higher and helped squeeze many first-time buyers to the sidelines.

As mortgage rates climbed and some migration flows normalized, demand in Boise cooled, and inventory began to rebuild. By late 2025, the new forecasts suggest the market is shifting from a frenzied seller’s market toward something closer to balance, with a real possibility of slight nominal price declines in 2026.[boisedev.com]

Yet even a mild dip in sale prices doesn’t automatically fix affordability. The Boise report points out that rents remain high and overall housing costs still strain many households, especially those who moved to the region chasing lower costs earlier in the decade.[boisedev.com] That combination – softer prices but still-high costs – is a hallmark of a market in transition rather than one experiencing outright distress.

Implications for buyers, sellers, and small investors

For buyers in cities projected to see price declines, the 2026 outlook suggests a bit more leverage, not a free-for-all. Practical steps include:

• Watching local price and inventory trends monthly rather than relying on national headlines.
• Negotiating more assertively on contingencies, repairs, and closing costs in sub-markets where listings are sitting longer.
• Prioritizing payment comfort over squeezing out every last dollar of discount – a small rate move can matter more than a 1–2% price swing.

Sellers in these metros face a different calculus. With national prices still inching up, but local conditions under pressure, realistic pricing and strong presentation will matter more than ever. Overpricing based on 2022 comparables could lead to longer days on market and, ultimately, larger price cuts.

For small investors, the forecasts underscore the importance of cash flow and time horizon. In many of the 22 metros, rents remain comparatively strong even as price growth stalls, which can support buy-and-hold strategies – provided acquisitions are underwritten with conservative assumptions for appreciation and vacancy.

Stepping back, the emerging 2026 consensus is that the U.S. housing market is moving through a localized reset. National prices may continue to grind higher, but individual cities – especially those that surged the fastest – could see outright declines as affordability, inventory, and local economic trends reassert themselves. Understanding where your market sits on that spectrum will be critical to making smart decisions in the year ahead.