Data from Realtor.com shows that homes are staying on the market longer, with the average home spending 78 days listed in January 2026—an increase of 5 days compared to last year. With the market slowing, some may expect prices to fall, but this depends on the region and other factors.
Reports indicate that home prices are already declining, as 30 of the 50 largest U.S. cities recorded year-over-year price drops, with notable examples including Austin, Washington D.C., and Memphis. The average home price in the last quarter of 2025 was approximately $405,300, down from $423,100 at the beginning of the year.
Meanwhile, the housing inventory grew by 10% between January 2025 and January 2026, with 18% of homes seeing price reductions. However, inventory growth has slowed and remains 17.2% below pre-pandemic levels.
A significant increase in inventory is unlikely until mortgage interest rates decrease. Despite a slight drop in rates, many homeowners are holding onto the low 3% rates they secured during the pandemic. Additionally, sellers are hesitant to list their homes because weak buyer purchasing power makes it difficult to achieve their desired prices.
