Are Home Prices Finally Coming Down in 2026?

By Kerry Ellison

Over the past 30 years, Kerry has proven herself time and time again by remaining in the top tier of Central Arkansas real estate. As her business grew, Kerry saw the need to start a team to continue providing clients with the best experience possible.

If home prices were really going to drop significantly, wouldn’t we be seeing it clearly by now?

We’ve had higher mortgage rates for a while. In many parts of the country, inventory has finally improved. Buyers aren’t bidding the way they were two or three years ago. Because of this, many people are thinking that 2026 has to be the year prices finally fall.

But when we step away from the loud headlines and look at the actual national data, the story is a bit different.

I want to walk you through three major sources, what they are reporting, and what that really means for you as a buyer or seller.

What the national data shows. Let’s start with the Federal Housing Finance Agency (FHFA). Their House Price Index for Q1 2026 shows that national home prices are still up compared to last year. The growth rate is much slower than the pandemic surge, but it is still positive. That is a vital distinction.

When people talk about a “correction” or a “crash,” they usually imagine prices dropping across the board. The data simply does not show that happening.

Next, look at Zillow. Their Home Value Index also shows that U.S. home values are slightly higher than they were a year ago. We are seeing modest growth rather than double-digit appreciation, but we aren’t in negative territory.

Finally, Redfin’s 2026 housing forecast projects roughly 1% price growth nationally this year. This is a very different environment from the frenzy of 2021, but it is also nothing like the collapse of 2008.

When you put the FHFA, Zillow, and Redfin data together, the theme is consistent: slower growth and more balance, but not a national drop in value.

Why does it feel like prices should be falling? Homes are still expensive. Monthly payments are high because of mortgage rates, and first-time buyers are feeling stretched. Emotionally, it feels like prices should be correcting.

If home prices were really going to drop significantly, wouldn’t we be seeing it clearly by now?

We’ve had higher mortgage rates for a while. In many parts of the country, inventory has finally improved. Buyers aren’t bidding the way they were two or three years ago. Because of this, many people are thinking that 2026 has to be the year prices finally fall.

But when we step away from the loud headlines and look at the actual national data, the story is a bit different.

I want to walk you through three major sources, what they are reporting, and what that really means for you as a buyer or seller.

What the national data shows. Let’s start with the Federal Housing Finance Agency (FHFA). Their House Price Index for Q1 2026 shows that national home prices are still up compared to last year. The growth rate is much slower than the pandemic surge, but it is still positive. That is a vital distinction.

When people talk about a “correction” or a “crash,” they usually imagine prices dropping across the board. The data simply does not show that happening.

Next, look at Zillow. Their Home Value Index also shows that U.S. home values are slightly higher than they were a year ago. We are seeing modest growth rather than double-digit appreciation, but we aren’t in negative territory.

Finally, Redfin’s 2026 housing forecast projects roughly 1% price growth nationally this year. This is a very different environment from the frenzy of 2021, but it is also nothing like the collapse of 2008.

When you put the FHFA, Zillow, and Redfin data together, the theme is consistent: slower growth and more balance, but not a national drop in value.

Why does it feel like prices should be falling? Homes are still expensive. Monthly payments are high because of mortgage rates, and first-time buyers are feeling stretched. Emotionally, it feels like prices should be correcting.