Whereas final yr was the worst yr because the GFC by way of house worth progress, 2026 is slated to be one other typical UP yr for the housing market.
Some shops like Redfin have already referred to it because the “Nice Housing Reset,” anticipating worth normalization as housing affordability lastly improves.
Lengthy story brief, incomes are anticipated to outpace house worth positive aspects, and paired with lower mortgage rates, the housing market can start to heal.
However that’s attention-grabbing is house costs didn’t seem to go down a lot regardless of the mortgage price shock of the previous few years.
And the yr 2025 was reportedly the worst yr for house costs because the GFC, however is now apparently behind us.
Dwelling Costs Rose Much less Than 1% in 2025
First issues first. Dwelling costs elevated simply 0.9% from December 2024 to December 2025, per the most recent report from Cotality (previously CoreLogic).
The corporate identified that it was “one of many softest charges because the post-Nice Recession restoration.”
I dig some digging to ballpark house worth positive aspects because the prior cycle peak in 2006 and located it to be true.
That is what annual house worth progress seemed like based mostly on my findings:
2025: ~1% (lowest since GFC restoration)
2024: ~4–6%
2023: ~5–6%
2022: ~6–11%
2021: ~18–19%
2020: ~6–11%
2019: ~5%
2018: ~5–6%
2017: ~6–7%
2016: ~5%
2015: ~5%
2014: ~4–5%
2013: ~7–8%
2012: ~3–5%
As you may see, house costs elevated yearly since 2012. It’s been a pleasant run.
The yr 2012 was the primary profitable yr for the housing market post-GFC.
Previous to that, house costs fell yearly from 2007 by way of 2011 earlier than recovering.
And as said, they peaked round mid-2006 earlier than the crash started.
Final yr marked the worst yr since, although costs nonetheless eked out a small achieve.
Dwelling Costs Anticipated to Rise Almost 5% in 2026
However now it seems to be enterprise as traditional for the housing market once more, with Cotality forecasting a 4.5% rise in house costs this yr (from Dec. 2025 – Dec. 2026).
That will be squarely consistent with the standard annual achieve in house costs between 3-5%.
So does that imply the housing market already hit all-time low this cycle? That 2025 was the crash?
Or not less than the worst yr this cycle and the worst because the GFC. And with house costs now anticipated to rise once more, that the worst is behind us?
I in all probability wouldn’t get too far forward of myself right here nor would I simply take the forecast at face worth with no grain of salt.
However it’s doable that we see house costs flip increased once more, house gross sales quantity improve, and affordability enhance.
Simply notice that this restoration “will rely closely on wage progress and the way quickly consumers regain the buying energy wanted to satisfy sellers’ pricing thresholds, per Cotality chief economist Dr. Selma Hepp.
In different phrases, if we see extra layoffs and the next unemployment price, issues might go sideways (or truly down).
There are a whole lot of unknowns associated to AI and the way that may shake out for the workforce.
It Could Rely on the Metropolis and State In Query
As well as, house worth positive aspects (or losses) will rely on the particular market in query.
Bear in mind, actual property is native and never all markets are profitable or dropping proper now.
Per Cotality, the states of New Jersey (+5.5%), Illinois (+5.4%), Nebraska (+5.4%), and Connecticut (+5.1%) have been the strongest house worth performers over the previous yr, typically on account of an absence of present stock and reasonably priced costs.
In the meantime, we’ve seen unfavourable house worth progress in lots of Southern and Western states, together with Arizona, California, Colorado, Florida, and Texas.
Though there are some encouraging indicators in these states as effectively with stock dropping in locations like Florida, presumably main to cost stabilization this yr.
So is the worst behind us already? Is that even doable? Is it inevitable that we’ll expertise one other main housing crash?
Exhausting to know, however anticipating one other 2008-style housing crash within the speedy subsequent cycle appears unlikely.
Given how uncommon the 2008 crash was, experiencing one other one proper after can be shocking.
Learn on: Here’s Why the Housing Market Isn’t Crashing Today
Earlier than creating this website, I labored as an account government for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and present) house consumers higher navigate the house mortgage course of. Observe me on X for warm takes.
