Home Economics projects national home price appreciation of 1.6% in 2026, placing our forecast in the 15th percentile of historical outcomes and 31st percentile relative to panel economists. Over the full five-year forecast horizon (2025-2029), we expect cumulative appreciation of just 8.9%—a figure that falls in the 13th percentile of all historical five-year periods since 1975 and dramatically below the panel consensus of approximately 20%.

Inventory levels are a powerful predictor of home prices—but only if you know where, and over what time frame, to look. This analysis models the relationship across U.S. cities, uncovering a sweet spot: a 26-month change in inventory offers the strongest signal. We use that to identify which metros are most at risk of falling prices in the year ahead.

Inventory is rising—and nearing levels that, according to our model, tend to lead to falling home prices. We use months of supply as our measure of inventory, and estimate that prices begin to decline about 9 months after inventory crosses a threshold of 5.8 months. We're not there yet—but we’re close.

We use the strong association between income growth and home price appreciation to identify counties that are under and overvalued.