Summary
Home prices in the United States are expected to decrease by 2026 as sellers adjust their expectations to improve affordability. Builders have already been lowering prices to attract buyers, as high home prices and borrowing costs have reduced demand. The typical home price is much higher compared to household income, making it difficult for many to afford buying.
Key Facts
- The National Association of Home Builders predicts existing home prices will decrease by 2026.
- Currently, typical home prices are 4.9 times higher than median household income.
- Historically, home prices have been about three times higher than household income.
- Builders have been cutting home prices since 2022 to encourage sales.
- In October 2025, new homes cost less on average than existing homes.
- Many new homes are built smaller to meet demand for cheaper options.
- Roughly 19.3% of new homes sold at a discount in late 2025, compared to 18% of existing homes.
- Some economists believe home prices will continue to increase, but slowly.
