Home Prices Expected to Dip in 22 Cities: What Buyers Should Know

Expected Changes in the Housing Market for 2026

The housing market has been navigating turbulent waters, with elevated home prices and mortgage rates persisting above 6%—a challenging landscape for potential homebuyers. However, new predictions from Realtor.com indicate that 2026 may herald a more favorable era for buyers. Home prices are forecasted to dip in 22 of the largest U.S. cities, signaling a shift toward what experts are calling a 'more balanced housing market'.

A Look at the Projected Price Declines

Among the cities experiencing the most significant home price declines, the Cape Coral-Fort Lauderdale area is anticipated to see a staggering drop of 10.2%. Nearby North Port-Sarasota-Bradenton is projected for an 8.9% decline. The trend is most prevalent in Southeast and West regions, particularly Florida, where the COVID-era demand surge has finally begun to equilibrate.

The Economic Underpinnings of the Expected Changes

The shift in housing dynamics can largely be attributed to a combination of factors such as increasing inventory, expected slight drops in mortgage rates to around 6.3%, and strong wage growth. With homes now sitting on the market longer and inventories rising, buyers are poised to have more choices. Although the forecast expects less aggressive price declines overall, these trends highlight a notable shift from the frenzy of recent years when housing costs skyrocketed due to low rates and heightened demand.

The Broader Housing Market Context

According to various reports, existing home sales are set to increase slightly, from a projected 4.07 million in 2025 to around 4.13 million in 2026, indicating that while some markets cool, others adjust to foster growth. Realtor.com projects that in 78 other cities, home prices will continue to rise, albeit modestly, by about 4% across those locations.

Analyzing the Reasons Behind the Decline

Experts highlight the clear fracturing of the exuberant pandemic-era demand. Markets in Houston, Atlanta, and even parts of California are now seeing diminished buyer enthusiasm as the well-documented housing surge fails to sustain its momentum. This is important for prospective homebuyers to keep in mind as they navigate the potentially shifting terrain.

Potential Opportunities for Buyers

With the market set to balance out, it also opens up new opportunities for buyers. Many properties, especially in the declining areas, could provide better accessibility for first-time homeowners or others struggling to enter the market historically known for its affordability challenges. With mortgage rates nearing lower averages, many buyers could find combinations of improved inventory and manageable pricing, which were nearly impossible to find during the pandemic's escalation.

What This Means for the Future

As prices shift downward in select metropolitan areas, the potential for buyers increases significantly. Those considering entering the housing market in 2026 might find themselves in a more advantageous position than in previous years when competition and prices were at all-time highs. It will be essential for buyers to remain informed, financially prepared, and proactive as the market adjusts.

Your Next Steps Towards Homeownership

Stay updated on the housing market landscape and understand the opportunities that could come with these shifts. As we enter 2026, those looking to purchase should keep in mind the trends indicated by Realtor.com and other experts. Actively monitor these cities to identify where your budget might stretch further in this evolving market.

For those interested in making informed decisions, the upcoming year presents a strategic opportunity to explore the housing market. Sign up for alerts and educational resources from local real estate experts to prepare yourself for the changes ahead.