(Yahoo Finance) Data from Realtor.com shows that existing home sales are slowing down. The typical home for sale spent 58 days on the market in July 2025 — five more days than in June and a full week longer than one year ago.

If you’re a hopeful home buyer, you might be wondering: If the housing market is cooling, does that mean home prices are dropping?The answer depends on various factors, particularly on where you’re shopping for a home. Here’s what you need to know about housing prices as we head into the fall season.

Are house prices going down?

By many markers, home prices are, indeed, going down. The Federal Housing Finance Agency’s House Price Index shows a 0.2% decline in home prices between April and May (the latest data available), and Realtor.com’s July report shows price declines in 33 of the nation’s biggest 50 metros. Another eight cities saw home price growth, but at a slower clip than in the month previous.

According to the U.S. Census Bureau, the median home price in Q2 2025 was $410,800 — down from $423,100 at the beginning of the year. Housing inventory is also improving, which bodes well for home prices in the coming months. (More houses on the market means less competition, which typically means sellers need to lower prices to win buyers.)

Realtor.com’s data shows that the total active inventory of homes for sale jumped nearly 25% between July 2024 and July 2025, and over 20% of listings saw a price cut last month.

Still, inventory is lower than before the pandemic, and it’s unlikely we’ll see a huge jump in listings until mortgage rates fall. Many current homeowners are reluctant to give up the 3% mortgage rates they secured early on in the pandemic — especially with 30-year mortgage interest rates hovering in the upper-6% range for all of this year.

Mortgage rates could decrease soon, though. The Federal Reserve is poised to cut rates at least once this year, and Fannie Mae predicts a 6.4% average interest rate by the end of 2026. While it’s not a huge dip from today’s levels, it could inspire more homeowners to list their homes and buy into other properties.

Most forecasts call for home price growth to slow steadily over the next year. Fannie Mae’s Home Price Index, which measures year-over-year price growth, projects a fall from 3.8% this quarter to just 1.1% by the end of 2026. The Mortgage Bankers Association predicts the FHFA index to dip from the 2.8% annual increase seen in the last report to a mere 0.3% by the end of next year. This could mean a boost in affordability for buyers across the nation.

Where home prices have fallen

But if you want or need to buy a home before those declines come to fruition, choosing your market carefully can be a great way to snag a good deal.

For example, in Austin, Texas, housing prices have fallen almost 5% in the last year, and the typical home is sitting on the market for 65.5 days. Nearly a third of listings are seeing price cuts.

Here’s a look at some other markets where home prices have fallen:

Since July 2022, when the national market peaked, home prices in 19 of the 50 largest cities have decreased. Most notably, Miami has seen a nearly-18% dip in that three-year period. Austin prices dropped 14.8%, while nearby San Antonio prices fell 10.6%. San Francisco, Dallas, Orlando, Denver, and Raleigh all saw significant drops too.

Prices aren’t dropping everywhere, though — the fact that housing costs are down in 19 of the 50 largest metro areas means that prices are stagnant or increasing in 31 of the largest cities. For example, Detroit’s prices have held steady since July 2022, and housing prices have increased by over 20% in Milwaukee, Wis., Providence, R.I., and Cleveland.

Strategies for eager buyers

Waiting on more inventory or lower mortgage rates isn’t the only way tos to buy a home affordably.

Here are a few strategies to consider if you see homeownership in your not-so-distant future.

• Buy with an eye on refinancing. You could get into the market today with a home in your price range and look to refinance down the line. While you might get less house for your budget, you can start building equity. When rates come down, you can refinance your mortgage to a lower rate or even a different type of mortgage loan altogether.
• Start small. While it might not be your dream home, you could find housing happiness in today’s market by purchasing a condo or buying a lot and putting a tiny house on it. Both home types can cost considerably less than a single-family home and help you build equity that translates to cash when you’re ready to upsize.
• Go modular. No, these aren’t mobile homes. Modular homes are those that look just like a single-family home when constructed. The only difference is that they’re built in modules off-site and assembled when they get to your lot. They can also cost 10% to 20% less than a traditionally built home.

When will housing prices drop? FAQs

Will 2026 be a better time to buy a house?

It may be good to buy a house in 2026 because, according to industry forecasts from Fannie Mae and the Mortgage Bankers Association, interest rates will probably gradually decrease by then. Home price growth is expected to slow too.

Will U.S. housing prices ever drop?

Typically, house prices will fall when supply exceeds demand, and sellers need to lower prices to entice buyers. As of July 2025, home supply was increasing, but not to the point where the number of homes for sale had caught up to pre-pandemic numbers.

This article was edited by Maria Horat. Gold Country Properties