Home prices went negative for the first time in more than two years

Home prices are finally down from a year ago, though only partially, according to daily readings from Parcl Labs, which looks at high-frequency listing data on single-family homes, condos, and townhomes, both new and existing.

However, they may still be softer, as house prices have fallen by 1.4% in just the past three months.

Nationally, home prices have not gone negative since mid-2023, a year after the Fed raised interest rates from zero for the first time, and mortgage rates rose sharply. From March 2022 to June 2023, the average rate on a 30-year fixed mortgage rose from 3.9% to just over 7%, according to Mortgage News Daily.

But even then, prices were negative on an annual basis for only a few months. It was nothing like the Great Financial Crisis when home prices fell 27% from their peak in 2006 to their lows in 2012, according to the S&P Case-Shiller National Home Price Index.

“Recently, we have seen the emergence of a period of national resilience after a rapid rise during the Covid years, from 2020 to 2022,” said Jason Leoris, co-founder of Parcl Labs. “The sharp increase in mortgage rates in 2022 and 2023 created an affordability shock: buyers were priced out, sales volumes declined, and sellers were forced to adjust expectations. Historically, it is this combination of a credit shock or affordability shock, weak demand, and more inventory than the market can easily absorb that leads to widespread declines in national prices.”

The stock today remains historically low, but is coming off near-record lows in recent years. Active listings in November were about 13% higher than November 2024, but new listings were only 1.7% higher, according to Realtor.com. Sellers are also taking their homes off the market at an unusually high rate.

Prices nationwide are down less than 1%, but some markets are seeing more significant declines: Prices in Austin, Texas, are down 10% from a year ago; In Denver, they were down 5%, according to Parcl Labs. Tampa, Florida, and Houston each saw price drops of 4%, and Atlanta and Phoenix saw prices drop by 3%.

There are also markets seeing gains: in Cleveland, prices rose 6%; Chicago and New York City both saw price increases of 5%. Philadelphia saw prices rise by 3%. Pittsburgh and Boston both saw price gains of 2%, according to Parcl.

While other home price indices and surveys only measure existing home values, this index measures new and existing home values. There has been no government data on housing starts, building permits or sales of newly built homes since before the government shutdown began, so it’s difficult to paint any kind of supply picture in price forecasts.

However, construction companies reporting quarterly earnings indicated that demand remains relatively weak and that incentives are still necessary. Homebuilder sentiment remains in negative territory.

“We continue to see demand-side weakness as a slowing labor market and stretched consumer finances contribute to a difficult sales environment,” Robert Dietz, chief economist at NAHB, said in a November statement. “After single-family housing starts declined in 2025, NAHB expects slight gains in 2026 as builders continue to report future sales conditions in marginally positive territory.”

Mortgage rates haven’t moved much in the past three months, and had little reaction to the Federal Reserve’s latest interest rate cut on Wednesday. Therefore, housing prices are unlikely to have a significant impact either.

“Our base case from here is not a deep national downturn, but rather a period in which prices hover around zero, with small positive or negative year-over-year changes, rather than the double-digit gains of the pandemic era,” Leoris said. “How far they move in either direction will depend mainly on mortgage rates and the broader health of the economy.”