The median existing-home sale price hit $398,000 in February 2026, according to the National Association of Realtors, marking a slight year-over-year increase but masking significant regional divergence beneath the headline number. While national prices remain near record territory, the pace of appreciation has slowed sharply from the double-digit gains of prior years. More notably, half of the 50 largest metropolitan areas in the United States recorded outright price declines on a month-over-month basis—the broadest softening since the brief pandemic-era dip in 2020.
Affordability remains the defining challenge of the current market. At a 6.27% mortgage rate with a 20% down payment, the monthly principal-and-interest payment on a median-priced home comes to roughly $1,960. That represents about 23% of the typical American family’s gross monthly income—a ratio that stretches well above the historical norm of around 18%. For buyers putting down less than 20%, the burden is even heavier once mortgage insurance premiums are factored in. This affordability squeeze is the primary force pushing prices lower in many markets as sellers adjust expectations to meet buyers where they are.
The markets experiencing the steepest price declines tend to share common characteristics: rapid pandemic-era appreciation, elevated cost of living, and vulnerability to remote-work migration reversals. Austin, Boise, and Phoenix—all pandemic boomtowns—have seen median prices fall 3% to 6% from their 2025 peaks. Meanwhile, more affordable metros in the Midwest and Southeast, including Indianapolis, Columbus, and Raleigh, have proven more resilient, with prices either holding steady or posting modest gains. The divergence underscores how “the housing market” is really dozens of local markets, each responding to its own supply-and-demand dynamics.
Inventory levels are a bright spot for buyers. Active listings have risen roughly 20% year over year nationally, driven by a combination of new construction and a gradual increase in existing-home listings as the “lock-in effect” begins to fade. Homeowners who locked in ultra-low rates in 2020 and 2021 are slowly coming to terms with the reality that rates may not return to those levels, leading some to list their homes and move. This growing supply is giving buyers more negotiating power, longer inspection timelines, and fewer bidding wars.
For buyers, the current environment offers a window of opportunity that didn’t exist a year ago. More inventory, slower price growth, and increased seller concessions—including rate buydowns and closing-cost credits—mean that the effective cost of buying a home may be lower than headline rates suggest. For sellers, pricing realistically from day one is critical; overpriced listings are sitting on the market significantly longer than they did in 2024. The days of listing high and waiting for a bidding war are over in most markets.