Home prices could dip in 22 U.S. cities next year, report says. See where.

It’s still a tough time to get a foothold in the housing market, with homes sitting near record values and mortgage rates parked well above 6%. But the tide could turn in 2026, with property prices forecast to dip in 22 of the largest 100 U.S. cities and mortgage rates expected to ease slightly, according to a new analysis from Realtor.com.

The real estate market is expected to move in a more “buyer-friendly” direction next year, leading to the “most balanced housing market” since the pandemic, meaning that neither sellers nor buyers are likely to have the upper hand in negotiations, said Jake Krimmel, a senior economist at Realtor.com.

Mortgage rates are expected to dip to an average of 6.3% next year, a slight drop from 2025’s 6.6% average rate. Lower borrowing costs, as well as strong wage growth next year, should encourage more buyers to jump into the market, Krimmel added.

“2026 is going to be a year where we think the market is going to steady,” Krimmel said. “It’s going to show a lot of signs of getting back on track to what we consider to be normal.”

That will help push up existing-home sales, which are projected to increase less than 2% to 4.13 million properties in 2026, according to Realtor.com‘s report. That’s only a slight bump from this year’s projected 4.07 million home sales, but a notable change given that transactions have been relatively flat throughout 2025.

Where will prices drop?

Most of the 22 cities where home prices are forecast to drop next year are located in the Southeast and the West. For instance, seven of the eight largest cities in Florida are projected to see declines in home prices next year, with the sole exception of Miami, the report said.

The Cape Coral-Fort Lauderdale metropolitan area is expected to see the nation’s largest price decline next year, with homes dropping by 10.2%, the analysis says. That’s followed by the North Port-Sarasota-Bradenton, Florida region, with an 8.9% decline.

The cities with projected price drops include those where inventory has expanded, providing more choices for buyers, Krimmel said. Some of those metropolitan areas may now also have lighter demand from buyers compared with the COVID-era real estate boom, which was fueled by low mortgage rates and a shift to work-at-home policies.

“These places, among others, saw a huge frenzy during the pandemic, so part of what we are projecting is that demand continuing to come back down to earth,” Krimmel told CBS News.