In the past year, 53% of American homes lost value, the highest since 2012, with an average drop of 9.7%. However, only 4.1% of homes are worth less than their last sale price, and the median homeowner has gained 67% in value since purchasing. The housing market raised concerns for 2026.

Chief economist Selma Hepp forecasts 3% home price growth in 2026, varying by region. Higher mortgage rates and consumer debt are cooling overheated markets, but not collapsing. Pandemic-driven growth slowed, allowing potential buyers to enter the market with more affordability.

Despite cooling, the housing market isn’t distressed. Senior loan officer Darren Tooley attributes the slowdown to years of unsustainable appreciation. Inventory remains tight, and with dropping mortgage rates, markets may heat up again, bringing balance. The shortage of 4.7 million units may drive prices up when rates drop.

The Fed’s interest rate decisions in 2026 will impact affordability and consumer decisions. Regional trends suggest varied home price forecasts for different parts of the country. The shift away from pandemic-driven migration highlights job growth, affordability, and lifestyle priorities in homebuying decisions.

The Northeast benefits from high-paying jobs and affordable adjacent communities. While the overall housing market cooled in 2025, some regions continue to perform well. The housing market isn’t collapsing, but regional variations are expected in 2026.

Read more at Yahoo Finance: Is the Market Cooling or Collapsing?