Realtor.com data shows existing home sales are slowing. A typical house for sale in 2025. spent 62 days on the market in September – a full week longer than at this time last year. You may be wondering: If the housing market is cooling, does that mean home prices are falling? The answer depends on a variety of factors, especially where you buy your home.
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By most indicators, home prices are indeed falling. The Federal Housing Finance Agency’s Home Price Index shows home prices fell 0.1% from June to July (the most recent data available), while Realtor.com’s September the report indicates annual price declines in 33 of the country’s 50 largest metros. In the other four cities, there were no changes in average prices during the year.
According to the US Census Bureau, the median home price in 2025 in the second quarter was $410,800, compared to $423,100 at the beginning of the year. Housing inventory is also improving, which bodes well for home prices in the coming months. (More homes on the market means less competition, which usually means sellers have to lower their prices to win over buyers.)
Realtor.com data shows that the total active inventory of homes for sale as of 2024 in September until 2025 in September increased by 17%% and ad prices were reduced by almost 20% last month.
Still, the national housing inventory is lower than it was before the pandemic, and it’s unlikely we’ll see a huge jump in listings until mortgage rates drop. Even with the gradual decline in mortgage rates, many current homeowners are still unwilling to give up the 3% mortgage interest they secured at the start of the pandemic.
Most forecasts see home price growth slowing steadily next year. Fannie Mae’s home price index, which measures annual price growth, predicts that by 2026 will decrease from 2.8% at the end of this quarter to 1.1%. This could mean that buyers across the country will see an increase in affordability.
But if you want or need to buy a home before this recession hits, scoping the market carefully can be a great way to get a good deal.
In San Diego, for example, home prices have fallen nearly 5 percent over the past year, and the typical home sits on the market nine days longer than in 2024. in September. Well over half of the 50 largest metro areas are seeing price declines.
Here are some other markets where home prices have fallen:
Prices aren’t falling everywhere, though — the fact that home prices are falling in 33 of the 50 largest metro areas means prices are flat or rising in 17 of the largest cities. The Northeast is the main region of the US where home prices are still rising. For example, median home prices in the Pittsburgh metro area rose 6.3% since last September, while prices in Providence, RI, rose 4.8%.
Waiting for more inventory or lower mortgage rates isn’t the only way to buy a home on the cheap.
Here are some strategies to consider if you are considering buying a home in the near future.
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Buy with an eye on refinancing. You can enter the market today with a home in your price range and try to refinance. While you may get less housing for your budget, you can start building equity. When interest rates go down, you can refinance your mortgage to a lower interest rate or even a different type of mortgage loan altogether.
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Start small. While it may not be your dream home, in today’s market you can find housing happiness by buying a condo or buying a lot and building a tiny house on it. Both types of homes can cost much less than single-family homes and help you build equity that turns into cash when you’re ready to upgrade.
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Go to modular. No, these are not motorhomes. A modular home is one that is built to look like a single-family home. The only difference is that they are installed in modules off-site and assembled when they arrive at your site. They can also cost 10-20% less than conventionally built homes.
Buying a home in 2026 could be beneficial because interest rates will gradually decline until then, according to forecasts from Fannie Mae and the Mortgage Bankers Association. House price growth is also expected to slow.
Typically, home prices will fall when supply exceeds demand, and sellers must lower their prices to attract buyers. in 2025 in September domestic supply was increasing, but stocks in the Midwest and Northeast had not yet reached pre-pandemic levels.
If your finances are in order and this is the right stage of your life, it may be a smart time to buy a home. Interest rates have remained stubbornly elevated, but they are not reaching the sky. House price growth has also slowed, with many markets even seeing price declines in recent months.
Laura Grace Tarpley edited this article.