The US housing industry this week is seeing a cooler, fragmented market as the year draws to a close. For the first time since 2012, over half of US homes, 53 percent, have lost value in the past year with an average drop of nearly 10 percent. Despite that, overall home prices grew modestly, with the October median hitting an all-time high for that month at $415,200, a 2.1 percent increase over last year. Regionally, sharp declines hit the South and West, while markets in the Midwest and Northeast like Cleveland and Milwaukee saw annual gains above 8 percent.
A surprise mortgage rate dip to around 6.24 percent in November—the lowest in more than a year—briefly boosted both sellers and buyers. New listings are up 1.7 percent over last year and total inventory has climbed 12.6 percent, now consistently above a million homes for sale for 29 straight weeks. Homes now sit longer, averaging 49 to 64 days on the market, leading sellers to increase price cuts in an effort to move inventory before the holidays.
National home sales edged up 1.2 percent in October, extending a four-month streak of year-over-year growth and showing signs of buyers returning. However, consumer demand remains highly sensitive to affordability. Even with recent rate relief, the share of household income needed for a mortgage is still near record highs. First-time buyers are nearly absent from the market, while older buyers and repeat purchasers—often using cash or equity—continue to dominate.
Leaders like Home Depot report weak home improvement sales and cite the housing slowdown and low transaction volumes—just 28 out of every 1,000 homes changed hands so far this year, the lowest since the global financial crisis. Meanwhile, regulatory talk is mostly muted, though policymakers are under pressure to explore new mortgage products as affordability remains a critical barrier.
Looking ahead, forecasters see flat prices and a sluggish market through early 2026, though potential further rate cuts could unlock pent-up demand. Upward price pressure is muted by rising inventory, but a full rebound in home sales is not expected until the following year. For now, the industry is marked by increasing choice for buyers, more negotiation leverage, and a cautious wait-and-see attitude among both consumers and industry players.
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