U.S. Home Prices to Decline in Select Cities Amid Regional Market Corrections in 2026

Realtor.com forecasts that home prices will decline in 22 of the 100 largest U.S. cities in 2026, predominantly in Southern and Western states, with significant decreases anticipated in multiple Florida metros. These declines reflect ongoing corrections in markets that overheated during the pandemic homebuying surge, coupled with increased housing inventory from construction booms, particularly in Florida. While home price growth slowed nationally, affordability challenges persist due to elevated home prices, historically high mortgage rates, and rising ancillary costs such as property taxes and homeowners insurance, leading to a stagnant U.S. homeownership rate of 65 percent in mid-2025, the lowest since 2019. Despite the downward pressure in certain markets, Realtor.com projects a modest 2.2 percent rise in nationwide home prices by 2026, supporting a 1.7 percent increase in existing home sales. However, this growth is modest relative to the double-digit gains experienced during the pandemic years. The ongoing market dynamics illustrate the complex interplay between supply increases, demand fluctuations, and regional economic factors influencing price trends. Florida's metros including Cape Coral-Fort Myers (-10.2%), North Port-Sarasota-Bradenton (-8.9%), Tampa-St. Petersburg-Clearwater, and Deltona-Daytona Beach-Ormond Beach (both around -3.6%) are among those anticipated to experience the steepest declines. California's Stockton-Lodi and Washington's Spokane-Spokane Valley metros are also expected to see moderate price decreases. These patterns suggest a regional normalization following an intense pandemic-induced housing demand spike. The report highlights that buyers navigating the 2026 housing market should focus on financial preparedness and market understanding, noting that incentives from builders who are competing amid rising inventory could provide opportunities. Particularly in the South and West, new construction is becoming a more viable option as builders offer concessions to close deals. Overall, most large U.S. cities are projected to see slight price increases, averaging around 4 percent, indicating a transition to steadier growth conditions. This nuanced forecast underscores the persistent affordability constraints within the housing market, shaped by mortgage cost pressures, insurance premium trends, and tax considerations, all key factors for insurance and real estate professionals to monitor in their strategic planning and risk assessments.