The latest high‑frequency data suggested values have softened modestly, not crashed
Home prices inched into negative territory for the first time in more than two years, raising new questions for lenders and originators already grappling with a fragile purchase market.
The latest high‑frequency data suggested values have softened modestly, not crashed, but with enough momentum to matter for pipelines and pricing strategies.
Daily readings from Parcl Labs showed national home prices are now slightly below year‑ago levels, with values down about 1.4% over the past three months.
The data covered single‑family homes, condos and townhomes, both new and existing, at a time when official government statistics on new‑home construction and sales have been delayed by a federal shutdown.
“More recently we have seen a period of national softness emerging after the rapid run‑up during the Covid years, 2020 to 2022,” Jason Lewris, co‑founder of Parcl Labs, said.
“The sharp increase in mortgage rates in 2022 and 2023 created an affordability shock: buyers were priced out, sales volumes dropped, and sellers had to adjust expectations. Historically, that combination of a credit or affordability shock, weaker demand, and more inventory than the market can easily absorb is what tends to produce broad national price declines.”
While the pullback remained shallow – far from the roughly 27% peak‑to‑trough decline seen during the global financial crisis – the shift marked a psychological turning point.
Inventory in November stood nearly 13% higher than a year earlier, but new listings were up only about 1.7%, according to Realtor.com data cited in the Parcl analysis.
Sellers were also withdrawing listings at elevated rates. October delistings jumped nearly 38% year over year and were up about 45% year to date, cementing 2025 as the highest national delisting year since Realtor.com began tracking the metric in 2022.
Regional divides deepen
Beneath the national average, familiar boom‑and‑bust dynamics reappeared. Markets that have surged during the pandemic are seeing sharper reversals: prices in Austin are down about 10% year over year, with Denver off 5% and several Sun Belt metros registering mid‑single‑digit declines.
At the same time, a cluster of Midwest and Northeast cities – including Cleveland, Chicago, New York, Philadelphia, Pittsburgh and Boston – still posted modest annual gains.
Parcl’s own 2024 review highlighted that US prices have remained roughly 44% above March 2020 levels, even after a retreat of just over 3% from last summer’s peak, with softening starting earlier than usual in the year.
Builders and rates keep pressure on demand
On the supply side, public homebuilders have reported that demand stayed relatively weak and that incentives are still needed to move product.
Homebuilder sentiment remained firmly negative. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) inched up just one point to 38. That's well below the neutral 50 mark and marking the 19th straight month of negative sentiment.
The latest HMI survey revealed that 41% of builders cut prices in November, the highest share since the onset of the pandemic. This is the first time this measure has passed 40% in the post-Covid period.
“We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment,” NAHB chief economist Robert Dietz said.
“After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”
For mortgage professionals, the backdrop remains one of higher‑for‑longer borrowing costs. Industry economists expect only gradual relief ahead, with Fannie Mae projecting the 30‑year fixed to average about 6.2% in early 2026 before slipping below 6% by year‑end, and home price growth cooling toward roughly 1.3% that year.
First American’s Mark Fleming points to income growth outpacing price gains as a key driver of improving affordability rather than any rapid fall in rates.
A soft landing, not a crash
Despite the headline shift, Lewris framed the outlook as a plateau rather than a plunge.
“Our base case from here is not a deep national downturn, but a period where prices hover around zero, with small positive or small negative year over year changes, rather than the double digit gains of the pandemic era,” he said.
“How far they move in either direction will depend mainly on mortgage rates and the broader health of the economy.”
The message is less about bracing for a 2008‑style collapse and more about operating in a low‑growth, rate‑sensitive market where modest price declines, uneven regional trends and stretched borrowers keep risk management and creativity around affordability at the center of every deal.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
