Key figures (as of October 2026)
| Leading national home price index, August 2026 | up 2.1% year on year, from 1.9% in July |
| December 2025, first published | up 1.3%, the weakest calendar-year gain since 2011 |
| Low point of 2026 | up 0.7% in February and in March, as first published |
| December readings, as first published | 5.5% (2023), 3.9% (2024), 1.3% (2025) |
| Consumer price inflation | 3.4% in August 2026, 3.7% in September; home values down in real terms for the 15th month in a row in August |
| 30-year fixed mortgage rate | 7.24% on 29 October 2026, against 6.17% a year earlier; 7.40% in mid-October, the highest of the year |
| US policy interest rate | raised by 0.25 points to 3.75% to 4.00% on 16 September 2026; held on 28 October |
| Existing homes for sale | 1.60 million in September 2026, the most since November 2019; 4.8 months' supply, up from 4.5 a year earlier |
| Pending home sales | down 7.3% in September 2026 to the lowest reading on record, and 11.3% lower than a year earlier |
| Published 2027 price forecasts | 0.6% and 0.5% on two other national price measures; a survey of more than 100 housing experts in August 2026 expected 2.2%, also on another measure |
| Published 2027 mortgage rate forecasts | above 7% throughout 2027 in both major outlooks |
A slow year, then a summer pickup
The leading national US home price index, a non-seasonally adjusted repeat-sales index covering all nine census divisions, rose 1.3% in the year to December 2025, as first published. That was the weakest calendar-year gain since 2011. Annual growth slowed further in early 2026, to 0.7% in both February and March, before picking up through the spring and summer. By August 2026 it had reached 2.1%, up from 1.9% in July.
The gain still trails inflation. Consumer prices rose 3.4% in the year to August, so home values fell in real terms for the 15th month in a row. Regional differences are wide: in August the strongest major metro market, Chicago, was up 6.7% on a year earlier, while the weakest, Seattle, was down 2.0%. Markets in the East have generally outpaced those in the West.
The index reports with a two-month delay and uses a three-month moving average of sales, and homes usually go under contract a month or two before they close. The August reading therefore mostly reflects purchase decisions made in late spring and early summer, before the latest rise in borrowing costs.
Higher rates since the summer
Inflation picked up in 2026, helped by higher energy prices linked to temporary regional disruptions from March 2026. Consumer prices rose 3.7% in the year to September. The US central bank raised its policy rate by 0.25 points to a range of 3.75% to 4.00% on 16 September and kept it there on 28 October.
The average 30-year fixed mortgage rate reached 7.40% in mid-October, the highest of the year, and stood at 7.24% on 29 October. On the Centre's own calculation, that is 1.07 points higher than a year earlier, when it averaged 6.17%. The two major published outlooks for mortgage lending both expect the rate to stay above 7% throughout 2027.
More homes, fewer buyers
Higher rates are already weighing on sales. Pending home sales, a leading indicator of completed sales, fell 7.3% in September 2026 to the lowest reading on record, down 11.3% from a year earlier, with declines in all four regions. Existing-home sales ran at an annual rate of 3.99 million in September, down 2.2% on a year earlier.
Supply has been rising. There were 1.60 million existing homes for sale in September, the most since November 2019 and 4.6% more than a year earlier, equal to 4.8 months of sales, up from 4.5 months a year earlier. The median existing-home sales price was $417,500, up 1.3% on a year earlier. More choice for buyers and fewer buyers able to qualify at current rates both point to slower price growth.
What forecasters expect for 2027
Published forecasts for 2027 point to a much slower year than the current reading. Two major outlooks published in October 2026, each based on a different national price measure from the index used in this study, expect prices to rise 0.6% (fourth quarter on fourth quarter) and 0.5% in 2027. Both assume mortgage rates above 7% throughout the year.
A quarterly survey of more than 100 housing economists and experts, carried out in August 2026 before mortgage rates rose above 7%, expected national home prices to rise 2.2% in 2027, down from 2.5% expected for 2026. Because these forecasts use other price measures, they serve as a guide to direction rather than a direct forecast of the variable below.
How far the December reading can move
The December reading has moved by large amounts from one year to the next. On the Centre's own calculation from the figures as first published:
- 2023 to 2024: from 5.5% to 3.9%, 1.6 points lower.
- 2024 to 2025: from 3.9% to 1.3%, 2.6 points lower.
- Within 2026: from 0.7% in March to 2.1% in August, 1.4 points higher in five months.
The national index fell year on year in April and May 2023, its first falls since 2012, after mortgage rates rose sharply in 2022. That history is why the scenarios below spread weight across a wide range.
The global picture
Price growth has also slowed in the United Kingdom, where average house prices rose 0.9% in the year to August 2026, down from 1.2% in July. The euro area central bank kept its key interest rates unchanged on 29 October 2026, with the deposit rate at 2.50%, and said financing conditions had tightened. In the US office market, vacancy is between about 18% and 20% depending on the measure, and lower than a year earlier on the two main national measures, as new construction is at its lowest in decades.
What it means
US home price growth has slowed from 5.5% at the end of 2023 to near-stagnation, and the rise in mortgage rates since the summer of 2026 has added fresh pressure just as prices were picking up. On the Centre's estimates, a gain below 1.5% or a small fall is more likely than not, with a 55% combined weight on bands 1 and 2. The path of mortgage rates through 2027 is the main swing factor, and a faster easing of rates would shift the outcome towards the higher bands.
Scenarios: the year-on-year change in US home prices in December 2027
These probabilities are the Centre's analytical estimates, reasoned from the figures above. Because the bands are ordered, the forecast is scored with both the multi-category Brier score and the ranked probability score.* The variable is the year-on-year change in the leading national US home price index, not seasonally adjusted, the main national index, for December 2027, as first published, normally in the release on the last Tuesday of February 2028. Later revisions are ignored. The figure is read in percent as stated, so "1.3%" counts as 1.3% and a fall of 0.5% counts as -0.5%. A figure with more than one decimal place is rounded half up to one decimal place, once, before it is placed in a band, so 1.45% counts as 1.5%. A figure stated as "more than", "over", "about", "around", "nearly" or "almost" a number counts as that number. A figure reported as a range counts at its midpoint. The bands cover every possible value, and each edge falls in the higher band: exactly 0.0% falls in band 2, exactly 1.5% in band 3, exactly 3.0% in band 4 and exactly 4.5% in band 5. If no figure for December 2027 is published by 31 March 2028, the forecast is withdrawn.
Prices fall: under 0.0%
This would need mortgage rates to stay above 7% through 2027, as both major outlooks expect, while the record-low level of pending sales and the highest supply since 2019 push sellers to cut prices. The national index last fell year on year in May 2023, after a sharp rise in rates, and the December reading fell 2.6 points in a single year to 2025, so a fall from today's 2.1% is a real possibility and gets a meaningful weight.
Near-stall: 0.0% to under 1.5%
Both published price forecasts for 2027, 0.6% and 0.5%, sit in this band, as do the 1.3% December reading for 2025 and the 0.7% low of early 2026. It fits a year in which higher rates and rising supply slow price growth without turning it negative. It is the most likely band and gets the highest weight.
Steady: 1.5% to under 3.0%
The latest reading, 2.1% in August 2026, and the experts' survey forecast of 2.2% for 2027 both sit in this band. It would follow if the summer pickup holds and mortgage rates ease from their recent peak, but the survey was taken before rates rose above 7% and the August reading mostly reflects decisions made before then, so it gets a lower weight than band 2.
Pickup: 3.0% to under 4.5%
This would need mortgage rates to fall well below the published forecasts, for example if growth elsewhere in the economy slows and long-term interest rates come down, releasing demand held back in 2026. The December reading was last in this band in 2024, at 3.9%, so the weight is modest.
Strong rebound: 4.5% or more
This needs a sharp fall in mortgage rates together with limited supply. The December reading has not been this high since 2023, at 5.5%, and inventory is now the highest since 2019, so the weight is low.
What to watch
- Monthly index releases: whether the annual gain keeps rising from 2.1% or turns lower once the autumn rate rise shows up in the data.
- Mortgage rates: whether the 30-year fixed rate stays above 7% or falls back from its October peak.
- Inventory and pending sales: the number of homes for sale, months' supply and whether pending sales recover from their record low.
- Policy rates and inflation: further central bank decisions and the path of consumer price inflation, including energy prices.
- Updated forecasts: the next quarterly rounds of national home price forecasts and of the expert survey.
- Regional divergence: the gap between the strongest markets in the East and the weakest in the West.
Figures as of late October 2026. Probabilities are analytical estimates by the Ghaf Centre for Studies & Research.