Home prices go negative for the first time in over 2 years â and may stay that way for a while
Published Thu, Dec 11 2025
9:15 AM EST
Updated 8 Min Ago
Diana Olick@in/dianaolick@DianaOlickCNBC@DianaOlickWATCH LIVEKey Points
- Home prices are down 1.4% in the last three months.
- Active listings in November were nearly 13% higher than last year, but new listings were just 1.7% higher.
- Mortgage rates have been hovering in a narrow range for the past three months.
A home is shown for sale in The Heights in Houston, Monday, Oct. 27, 2025.
Kirk Sides | Houston Chronicle | Getty Images
Home prices have finally come down compared with last year, though just fractionally, according to daily reads from Parcl Labs, which looks at high-frequency listing data on single-family homes, condos and townhomes, both new and existing.
They may stay softer, though, as home prices are down 1.4% in just the last three months.
On a national level, home prices have not gone negative since mid-2023, a year after the Federal Reserve first brought rates up from zero, and mortgage rates moved sharply higher. From March 2022 to June 2023, the average rate on the popular 30-year fixed mortgage went from 3.9% to just over 7%, according to Mortgage News Daily.
But even then, prices were negative on a year-over-year basis for just a few months. It was nothing like the great financial crisis when home prices dropped 27% from their peak in 2006 to their trough in 2012, according to the S&P Case-Shiller National Home Price Index.
"More recently we have seen a period of national softness emerging after the rapid run-up during the Covid years, 2020 to 2022," said Jason Lewris, 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 dropped, and sellers had to adjust expectations. Historically, that combination of a credit or affordability shock, weaker demand, and more inventory than the market can easily absorb is what tends to produce broad national price declines."
Inventory today is still historically low, but it has come off its near-record lows of recent years. Active listings in November were nearly 13% higher than November 2024, but new listings were just 1.7% higher, according to Realtor.com. Sellers are also pulling their homes off the market at an unusually high rate.
Prices nationally are down less than 1%, but certain markets are seeing more significant drops: Prices in Austin, Texas, are down 10% from last year; in Denver, they're down 5%, according to Parcl Labs. Tampa, Florida, and Houston both saw prices fall 4%, and Atlanta and Phoenix saw price decreases of 3%.
There are also markets seeing gains: in Cleveland, prices gained 6%; Chicago and New York City both saw price increases of 5%; Philadelphia saw prices rise 3%; and Pittsburgh and Boston both saw 2% price gains, according to Parcl.
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While other home price indexes and surveys measure just existing home values, this one measures both new and existing. There has been no government data on housing starts, building permits or sales of newly built homes since before the government shutdown started, so it's difficult to paint any kind of supply picture in the price forecast.
That said, builders reporting quarterly earnings have indicated that demand is still relatively weak and incentives are still necessary. Homebuilder sentiment is still well into negative territory.
"We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment," said Robert Dietz, NAHB's chief economist, in a November release. "After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory."
Mortgage rates have not moved much in the last three months, and had very little reaction to the latest Federal Reserve rate cut Wednesday. Home prices, therefore, are unlikely to do much either.
"Our base case from here is not a deep national downturn, but a period where prices hover around zero, with small positive or small negative year over year changes, rather than the double digit gains of the pandemic era," said Lewris. "How far they move in either direction will depend mainly on mortgage rates and the broader health of the economy."