New-home prices are already down nearly 15% from their 2022 peak, reflecting mounting pressure on builders as inventory levels rise
New data from First American Properties reveals meaningful structural shifts that will define the year ahead.
COLUMBUS, Wis., Jan. 22, 2026 (GLOBE NEWSWIRE) — As we move just twenty days into 2026, the U.S. housing market is already sending clear and increasingly consequential signals. While public discourse continues to focus on headline statistics, a deeper review of the underlying data reveals meaningful structural shifts that will define the year ahead.
Based on December housing data released to date, combined new and existing home sales for 2025 are estimated at approximately 4.7 million units, well below the long-term annual average of 5.9 million and rivaling only the weakest years of the Global Financial Crisis. This decline is occurring despite a U.S. population that has grown more than 12% since 2008, underscoring the magnitude of today’s affordability constraints.
Price trends are also shifting decisively. The National Association of Realtors reported that existing-home median prices rose just 0.42% year-over-year in December, down sharply from a 5.85% increase one year earlier. New-home prices are already down nearly 15% from their 2022 peak, reflecting mounting pressure on builders as inventory levels rise.
Regionally, the most notable development is emerging from the Midwest. After years of relative price resilience, the Midwest registered a year-over-year decline in median sales prices in one closely tracked data series for the first time since late 2022. While one month does not define a trend, this reversal—combined with ongoing price declines in the South and West—suggests that national price indices may soon turn negative. Together, these regions account for nearly 90% of U.S. home sales.
Builder data further reinforces this outlook. Recent sales have shifted sharply toward lower price tiers, with a growing share of transactions occurring below $300,000. At the same time, builders ended October with nearly nine months of supply, with additional homes still under construction. Price concessions remain widespread, and lower mortgage rates alone are unlikely to meaningfully revive demand.
Affordability pressures are also evident in credit and labor market indicators. FHA serious delinquency rates rose again in December, signaling growing stress among first-time and lower-income borrowers. Meanwhile, unemployment among recent college graduates remains elevated compared to prior cycles, limiting the pool of new buyers.
While policy proposals aimed at stimulating demand—including expanded access to retirement funds—may provide temporary support at the margin, they are unlikely to offset the broader forces at work. Housing sentiment remains highly sensitive to affordability, and sustained improvement will require further price adjustments.
In short, the data beneath the headlines point to a market that is still recalibrating. Volatility may persist, but the evidence increasingly suggests that home prices and sales volumes are adjusting toward more sustainable levels as we move through 2026.
About First American Properties
First American Properties is a privately held investment and real estate management firm headquartered in Columbus, Wisconsin. The firm specializes in strategic asset acquisition, development, and portfolio management across diverse sectors of the U.S. economy.
As inventory rises, I hope young people are considering leaving their rental situation and becoming buyers. Even if they want to explore co-buying with friends or roommates. It is hard to get a mortgage and make mortgage payments, but is it any more difficult that paying rent?