Feb 11, 2026
After years of bidding wars and sticker shock, U.S. home prices are starting to slip, bringing welcome relief to prospective buyers.
Average U.S. home prices fell 1.4% over the past three months, based on November data from Parcl Labs (1). At the same time, mortgage rates dipped below 6%, hitting their lowest level since early 2023, according to Mortgage News Daily (2).
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While homes aren’t suddenly cheaper across the board, here are some areas homebuyers can keep their eyes on if they’re looking for a potential deal.
Where buyers may find the best deals in 2026
According to MarketWatch, markets where there was previously a lot of rapid price growth and new construction are now slowing down.
“Some of the strongest buying opportunities this year may appear in small to mid-sized markets that offer greater affordability, with home prices below the national average,” says Nathan Garrett, owner of Realty Homes.
Sun Belt cities are also dealing with the downside of recent rapid growth. Cities like Phoenix now face “stagnant inventory and low demand,” says Jules Garcia, a real estate agent at Coldwell Banker Warburg. She noted that potential limits on institutional investors could further narrow the buyer pool.
In the parts of the western U.S., including Arizona, Utah, Colorado, Idaho, Nevada, and some of Montana and New Mexico, markets also appear to be resetting. Supply is starting to outpace demand, and homes that were purchased and flipped as short-term investments are starting to be listed again, Tom Orr of Northwest Exteriors told Market Watch.
Florida is also cooling after years of sharp price gains. One researcher forecasted the biggest declines this coming year in Cape Coral and North Port, Fla.
Smaller markets are also tipping toward buyers in small and suburban Midwest and Southeast cities, such as St. Louis. Ben Mizes, co-founder of Clever Offers, told Market Watch these markets have “incredible” deals, more inventory and less competition than major metro areas.
The migration-driven price hikes in Nashville, Raleigh, Columbus and Indianapolis are now slowing down too, says Jonathan Ayala, founder of Real Estate Photography, told Market Watch.
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Even major metros are seeing changes: parts of Austin and New York City are getting somewhat less expensive. And while Seattle’s shift has been slower, James Dainard, real estate entrepreneur and host of A&E’s Million Dollar Zombie Flips, said about a quarter of real estate listings in that city dropped their prices in 2025.
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Why the shift matters and how to spot deals
For buyers who have been waiting on the sidelines because of soaring prices and competition, this shift could mark a turning point.
Jake Vehige, president of mortgage lending at Neighbors Bank, recommends buyers look for homes staying on the market longer and sellers who are more open to concessions (1).
Affordability is still a top concern for households nationwide, and even small price reductions or seller concessions can make a difference in monthly payments, especially when combined with slightly lower mortgage rates.
Even if you’re not shopping in one of the cities mentioned, the same strategies apply in any cooling market:
- Make sure you know your budget and explore different loan options (3)
- Watch for rising inventory and properties sitting for longer on the market (4)
- Look at homes with price reductions
- Negotiate seller concessions like closing costs or repairs (5)
- Focus on less competitive neighbourhoods to avoid bidding wars
- Get pre-approved so that you can move quickly when opportunities appear
- Work with local agents who know which sellers are motivated
- Consider fixer-uppers or fringe neighborhoods if you’re honing in on high-cost cities
The housing market isn’t collapsing, but in some cities, it’s finally loosening for buyers. For those who’ve waited out the frenzy, 2026 could offer things that have been missing for years: options, negotiating power and a shot at affordability.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Market Watch (1); Mortgage News Daily (2); CFPB (3); Realtor (4); Business Insider (5)
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Jessica is a freelance writer with a professional background in economic development and small business consulting. She has a Bachelor of Arts in Communications and Sociology and is completing her Publishing Certificate.
