Are Home Prices Going Down? The Answer May Surprise

Richard Montgomery on Apr 21, 2026

Q: Our home is about $500K more or less. We are in the Midwest and enjoyed a nice run-up two to three years ago. A definite seller's market. In the past year, we have seen sellers reducing prices and extending market times. Are home prices going down everywhere?

A: No, home prices are not going down everywhere and your Midwest home may actually be one of the better-positioned properties in the country right now.

What you're observing locally -- price reductions and longer days on market compared to two or three years ago -- is real, but it reflects a return to a more balanced market after the frenzy of 2021 to 2022, not a broad collapse. The national picture is more nuanced than the headlines often suggest.

The current data reveals what economists are calling a "two-speed" housing market. While high-cost coastal and Sunbelt regions are undergoing price corrections, the Midwest and Northeast are proving remarkably resilient due to their relative affordability and stable employment bases, says Cotality.

Nationally, U.S. home prices were up just 0.74% year over year in January 2026, one of the slowest appreciation rates in recent history. Meanwhile, the Midwest posted an average annual growth of 3.56%, led by Illinois at 4.91%, Wisconsin at 4.78%, and Nebraska at 4.75%, according to CMP. That's a meaningful contrast with states like Florida (-2.36%), Colorado (-1.31%) and Texas (-1.09%), where the post-pandemic migration boom has cooled and expanded inventory is weighing on prices.

Why is the Midwest holding up? In markets where very little new housing has been added, even modest demand is enough to keep prices moving higher. In markets where construction has been heavier - particularly in the South and West -- prices in some areas are expected to fall by as much as 10%. The Midwest simply didn't overbuild.

The early 2026 housing landscape is defined less by runaway price growth and more by a persistent shortage of homes and Midwestern metros, including Cincinnati, St. Louis, Columbus and Cleveland, rank among the hottest large markets, cementing the region's relative affordability and growing appeal. HousingWire covered these Midwest metro cities.

The price reductions you're seeing in your local market are worth monitoring, but they likely reflect sellers who overreached on price during the peak - not a market in distress. What's normal now is a more balanced housing market where not every seller is getting exactly what they want. Some are choosing to reduce prices and others are choosing to pull listings and wait because they have the flexibility to do so. Here is the scuttlebutt from the National Association of Realtors.

For a $500,000 home in the Midwest, the fundamentals remain on your side: limited inventory, stable employment and relative affordability compared to coastal markets. If you're not selling imminently, there's little cause for alarm. If you are planning to sell, looking at comparable sales in your neighborhood, rather than chasing the 2022 peak, will be the key to a successful transaction.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @montgomRM or DearMonty.com.

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