After more than a year of headlines predicting falling home values and an upcoming housing crash, the latest data is telling a much less dramatic story.
Home price growth slowed significantly over the past couple of years, which gave buyers some much-needed breathing room. But now, there are early signs that the pace of appreciation may be starting to increase again.
This does not mean prices are about to take off like they did during the pandemic-era market. It does mean the cooling trend may be reaching its limit in more areas, and that matters whether you are planning to buy, sell, or simply keep an eye on the value of your current home.
For the past couple of years, home price appreciation has been steadily slowing down.
According to Redfin, annual price growth was around 7% in the middle of 2024. Since then, that pace has moderated considerably as mortgage rates remained elevated, buyer demand cooled, and more homes became available.
That slowdown was not necessarily a negative development. In many ways, it was exactly what the housing market needed after several years of rapid and unsustainable price increases.
Slower growth gave buyers more time to consider their options, reduced some of the pressure to compete, and helped keep purchase prices from climbing as quickly as they had before.
But when you look at the most recent portion of the data, the downward trend appears to be leveling out. Price growth may have reached its lowest point and started to inch upward again.
A few months of data are not enough to guarantee a lasting change, but there are other signs that support the idea that the market may be turning.
One of the clearest signs of change is the shrinking number of markets where home prices are falling.
Research from ResiClub and Zillow found that roughly 36% of the 300 largest housing markets were experiencing year-over-year price declines around the middle of last year.
Since the beginning of this year, that share has continued to fall. Now, only about 23% of those markets are seeing declines.
It is also important to put those declines into perspective. In most of the markets where prices have softened, the changes have been relatively mild. These are generally small adjustments following several years of substantial appreciation, not the dramatic collapse some headlines suggest.
When fewer markets are experiencing declines, it naturally means more markets are either holding steady or beginning to see prices rise again.
That shift is one reason economists expect national home values to continue appreciating this year, even if the gains remain modest.
Current forecasts generally point to national home price growth of around 2.3% this year.
That is a much slower and more sustainable pace than the double-digit increases buyers and homeowners experienced a few years ago.
For prices to reach that projected level, appreciation would likely need to strengthen somewhat during the second half of 2026.
That does not mean every month will show gains or that every market will move in the same direction. Real estate rarely follows one perfectly smooth line.
It does suggest that, nationally, the market is expected to continue growing rather than enter a widespread decline.
Moderate appreciation can be healthy for both sides of the market. Buyers gain more predictability, while homeowners continue building equity without the market becoming overheated.
Whenever national home price data is released, it is important to remember that it represents an average of hundreds of individual housing markets.
Your neighborhood may not look anything like the national trend.
Some cities are seeing prices rise faster because of strong job growth, population increases, and limited inventory. Others are still working through an increase in available homes and may continue seeing flat or slightly softer prices.
Even within the same city, one neighborhood or price range may perform very differently from another.
A well-priced entry-level home may receive multiple offers while a larger property a few miles away sits for several weeks. A popular school district may continue appreciating while another part of the market offers buyers more room to negotiate.
That is why broad statements such as “home prices are falling” or “prices are rising again” rarely give buyers and sellers enough information to make a real decision.
Not long ago, the largest housing markets were divided almost evenly between those seeing price gains and those experiencing declines.
That balance is beginning to shift.
According to Redfin, more than half of major metro areas recently recorded year-over-year price increases.
This does not mean every market is suddenly booming. It simply shows that the number of areas experiencing positive price movement is increasing.
Selma Hepp, Chief Economist at Cotality, explains that local markets are still telling very different stories. Some areas supported by strong employment and wage growth are seeing prices accelerate, while more affordable markets in parts of the Midwest are also gaining momentum.
That local variation is exactly why homeowners and buyers should look beyond national averages before making a decision.
Slower home price growth has worked in buyers’ favor over the past year.
It created a more predictable market and gave buyers more time to compare homes, negotiate with sellers, and plan around a budget without prices climbing as quickly.
If appreciation is starting to pick up in your area, buying sooner could mean purchasing before prices move higher later in the year.
That does not mean you should rush into a home that does not fit your finances or your life. It does mean waiting solely because you expect a major price drop may not produce the result you are hoping for.
There are also other conditions working in buyers’ favor right now. Inventory has improved in many areas, homes are often spending more time on the market, and some sellers remain open to concessions, repairs, or closing-cost assistance.
If prices begin to rise more consistently and buyer demand increases, some of that leverage could gradually shrink.
If you already own a home, slower appreciation did not necessarily mean you stopped building wealth.
Home values continued to rise nationally, just at a more moderate pace than before.
If price growth strengthens during the remainder of the year, homeowners may begin accumulating equity a little faster again.
Lawrence Yun, Chief Economist at the National Association of Realtors, projects that the typical homeowner could gain roughly $16,000 in housing wealth this year.
Your actual gain will depend on your local market, the condition of your home, and how long you have owned it. Still, the broader trend is encouraging for homeowners who have been concerned about whether their property is losing value.
Even in markets where prices softened slightly, many homeowners remain well ahead because of the substantial appreciation that occurred over the past five years.
Early signs of stronger price growth may also be encouraging if a sale is on your radar.
More stable or rising values can help protect your equity and may bring additional buyers back into the market.
But it is important not to mistake national appreciation for permission to overprice your home.
Today’s buyers remain selective and payment-conscious. Inventory has increased in many markets, which means your home still needs to compete with other available listings.
The sellers seeing the strongest results are generally the ones who price their homes according to current local conditions, prepare them well, and make them easy for buyers to tour.
A market that is beginning to appreciate again can support your sale, but the right launch strategy still matters.
Home price headlines are often confusing because two seemingly contradictory things can be true at the same time.
Prices can rise nationally while declining slightly in certain cities. Values can increase across a metro area while remaining flat in a specific neighborhood. A certain price range can be highly competitive while another gives buyers substantial negotiating power.
The most useful information is not simply whether national home prices are up or down.
It is how much similar homes are selling for in your neighborhood, how long they are staying on the market, how much inventory is available, and whether sellers are reducing prices or receiving multiple offers.
That local context is what helps buyers decide whether to act now and helps sellers understand how to position their home.
Home price growth slowed significantly, but the latest numbers suggest that slowdown may be reaching its limit.
Fewer markets are seeing declines. More major metros are moving into positive territory. And experts still expect home values to rise nationally this year.
This is not a return to the extreme price growth of the pandemic years, and that is probably a good thing. A steady, moderate pace is generally healthier for buyers, sellers, and homeowners alike.
If you are considering buying or selling, the next step is understanding whether this national shift is already showing up in your local market.
A current neighborhood analysis can help you see what prices are actually doing near you and what that could mean for your timeline, budget, or expected sale proceeds.