Market Stats
Are Home Prices Dropping?
By David Golovin · September 10, 2026 · 3 min read
Mortgage rates are near a year high. Sales volume is down. But home prices have held in most markets. Here is why, and where cracks are starting to show.
Why prices hold even when rates are high
The biggest force keeping prices up is low inventory. Tens of millions of homeowners locked in 2% to 3% mortgages between 2020 and 2022. Selling means giving up that rate. Most are choosing to stay put, which keeps the number of homes for sale well below historical norms. Source: NAR
| Market factor | Effect on prices |
|---|---|
| High mortgage rates | Slows buyer demand and sales volume |
| Lock-in effect | Sellers with 2-3% loans stay put, keeping inventory low |
| Low inventory | Keeps prices from falling even when demand drops |
| Job market | Steady employment supports household spending and home prices |
Where prices are softening
Some markets built on pandemic demand are cooling: parts of Florida, Texas, and mountain resort markets saw price cuts rise through 2025. But broad national price declines have not materialized. Source: S&P CoreLogic Case-Shiller
What this means for buyers
Waiting for a price drop that does not arrive means paying rent and still buying at a high rate later. Some buyers are solving the affordability problem differently: finding homes with assumable mortgages at 2% to 3%, which cuts the monthly payment significantly even at today’s prices. Roots has nearly 20,000 active assumable listings across the country.
FAQ
Are home prices going down?
In most U.S. markets, home prices have held steady or grown modestly despite high mortgage rates. The main reason: sellers with low-rate loans are not listing, so inventory stays tight and there are not enough homes to push prices lower.
Will home prices drop if mortgage rates go up?
Higher rates reduce what buyers can afford, which slows sales volume. But prices only fall when enough supply comes to market. Because many homeowners are locked into 2-3% mortgages they do not want to give up, inventory has stayed low and prices have been resilient.
When will home prices go down?
A meaningful price drop typically requires a surge in supply or a sharp drop in demand. Neither is currently in place in most markets. Affordability is stretched, but prices are holding.
Are houses overpriced right now?
Affordability is near historic lows. Prices have not corrected significantly because supply has not caught up. Whether that makes a home overpriced depends on your local market, your timeline, and what alternatives look like.