Housing News

Home Prices Have Fallen for 12 Straight Months. What Does That Mean for Homebuyers?

Home prices have been falling for a full year, giving prospective homebuyers some welcome relief and more room to negotiate.

The national median asking price dropped to $415,000 in October, down 2.2% from a year earlier, according to Realtor.com’s latest housing report. That marked the 12th consecutive month of annual declines, accelerating from September’s 1.4% decrease.

More homes are available, fewer are going under contract, and sellers in some markets are reducing prices. For homebuyers ready to purchase, that could mean better deals.

Jake Krimmel, senior economist at Realtor.com, said the benefits depend on local market conditions and whether homebuyers are actively searching.

“On paper, falling asking prices are good news for buyers,” said Krimmel. “But what they mean on the ground depends on a buyer’s location and whether they’re already in the market or still on the sidelines.”

Here’s what homebuyers need to know about falling prices and where they may find opportunities to save.

Why are home prices falling?

Higher mortgage interest rates have slowed demand, leaving more properties available.

The number of homes under contract fell 10.5% year over year in October, the largest annual decline in three years. New contract signings dropped 17%, reaching their lowest October level in Realtor.com’s records.

Meanwhile, active listings increased 7.4% to nearly 1.2 million homes. Housing stock has grown every month since February, an unusual pattern for a market where listings typically peak in late summer or early fall.

Nationally, the number of homes for sale is now just 6.6% below typical pre-pandemic levels.

For homebuyers who struggled to find a suitable property when competition was stronger, the growing selection may make the search easier.

Are lower home prices making homes more affordable?

Lower asking prices can reduce payments and mortgage balances, although borrowing costs remain an important consideration.

Thirty-year mortgage rates averaged 7.18% in the week ending Nov. 5, compared with 6.22% a year earlier, according to Freddie Mac data.

Krimmel said higher rates have offset some savings from lower prices.

“That means the same monthly payment today buys about 10% less house than in Oct 2025, more than enough to wipe out the drop in list prices in most markets,” said Krimmel. “[This] makes would-be buyers hesitant to jump in.”

Still, a 3% reduction on a $400,000 home would lower the price by $12,000. With 20% down, that would reduce the down payment by $2,400 and the mortgage balance by $9,600.

Homebuyers may also negotiate a mortgage rate buydown to lower monthly payments.

Where are home prices falling the most?

Price declines vary considerably by location, according to Realtor.com.

Median asking prices fell in three of the four major U.S. regions. The Northeast recorded the largest annual decrease at 4.8%, followed by the South at 2.6% and the West at 1.7%. Midwest prices rose 0.8%.

Adjusted for home size, asking prices per square foot declined in 37 of the nation’s 50 largest metropolitan areas.

Austin, Texas, recorded the steepest decline at 8.2%. The Texas capital city was followed by Tampa, Fla., at 5.2%, and Denver, Colo., at 3.6%.

The South and West regions also have more homes for sale than before the pandemic, while the Northeast and Midwest remain below historical levels.

These differences can help homebuyers identify markets where sellers face more competition.

Are home sellers willing to negotiate?

About one in five homes for sale had a price reduction in October. That’s the highest share for that month since 2022.

Price cuts were particularly common in Indianapolis, where 31.8% of listings had been reduced, followed by Denver at 31.3% and Portland, Ore., at 31.1%.

However, the share of listings with price cuts declined from September. New listings also fell 7.5% annually, suggesting some homeowners are postponing their plans to sell.

Meanwhile, just 4.4% of active listings were withdrawn from the market, compared with 4.6% a year earlier.

That gives homebuyers an opportunity to focus on sellers motivated to complete a sale.

How can homebuyers save money in today’s market?

Homebuyers may be able to negotiate terms that reduce upfront expenses or monthly payments.

For example, seller concessions can cover eligible closing costs, preserving cash for moving expenses, repairs, or emergencies.

A permanent or temporary mortgage rate buydown may also make payments more manageable, depending on the loan program and seller participation.

Properties listed for several weeks or already reduced in price may be worth particular attention.

The 10 housing markets where asking prices fell the most^*

These were the top 10 housing markets that recorded the largest year-over-year decreases in median asking prices among the nation's 50 largest metropolitan areas in October 2026. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

1. Austin, Texas: -10.2% year-over-year to a median $439,650
2. Los Angeles: -9% to $1 million
3. Memphis, Tenn.: -7.5% to $299,900
4. Tampa, Fla.: -5.9% to $385,000
5. Denver: -5% to $564,900
6. Louisville, Ky.: -4.8% to $300,000
7. Minneapolis: -4.8% to $399,900
8. Indianapolis: -4.7% to $305,000
9. Boston: -4.4% to $765,000
10. Charlotte, N.C.: -4.1% to $419,900

*These figures reflect changes in median listing prices, which can be influenced by the size and types of homes available for sale. They do not necessarily mean individual properties have lost the same percentage of their value.