US Housing & Mortgage Markets
House price appreciation has hit a new cycle low, and the trajectory is pointing lower still — the question is no longer whether growth will stall, but whether we're months away from the first national YoY price decline since the post-pandemic correction.
PRICES: A NEW CYCLE LOW, AND THE FLOOR IS SOFT
McBride's read of the Freddie Mac HPI is the sharpest signal in today's data. The national FMHPI came in at +0.7% year-over-year in March — a new cycle low, down from +0.8% in February and a long way from the +19.2% peak in July 2021. Month-over-month, the index ticked down -0.07% on a seasonally adjusted basis.
What makes this notable is the forward look: McBride flags that the FMHPI declined in both April and May 2025, meaning the YoY comparisons next month will be essentially flat to March's reading — no bounce coming. With inventory elevated and sales running near their lowest levels since 1995, the structural setup for prices is weak. McBride states plainly that prices "might turn negative year-over-year sometime in 2026."
The regional picture is fracturing. 29 states plus D.C. are now below their previous price peaks on a seasonally adjusted basis. The worst-hit markets are concentrated in two places: the Mid-Atlantic (D.C. at -4.5%, Maryland -2.3%) and the Sun Belt overshoot markets (Washington state -2.4%, Colorado -2.3%). At the city level, 215 of 387 tracked CBSAs are below peak — and the 5 deepest-declining metros are all in Florida and Texas, with Punta Gorda now edging out Austin for the largest single-market drawdown.
The cross-index picture confirms the softness: the NAR median price is up +1.4% YoY in March (a slightly less deflationary read, partly a composition effect), while Case-Shiller sits at +0.7% YoY through February. McBride notes that FMHPI and NAR medians tend to lead Case-Shiller — suggesting the March Case-Shiller print, when it arrives, will hold near current levels rather than recovering.
STRUCTURAL BACKDROP: THE SHORTAGE THAT MADE THIS MESS
Erdmann's latest (Part 2 of his 20th vs. 21st Century Housing series) returns to the supply-constraint thesis he's developed over years: that a nationwide housing shortage was effectively policy-engineered, not market-organic. The piece itself is subscriber-only, so the substance isn't available here — but the framing matters as context for the price data above. Markets like D.C., Maryland, and coastal metros generally reflect the compounded effect of constrained supply meeting a demand shock; the fact that they're now correcting hardest may reflect that prices overshot most severely where building was most restricted.
(Note: Brian Potter's post today covers oil refinery mechanics — interesting construction-industry context, but outside the housing signal scope.)
Closing synthesis: The housing market in spring 2026 looks increasingly like a slow-motion repricing. The demand shock of 2020–2022 has fully unwound in many Sun Belt and Mid-Atlantic markets, and national price appreciation is grinding toward zero. The combination of elevated inventory, rate-constrained buyers, and comps that are now lapping weakness means the next few months of YoY data will be closely watched for the first negative print. Regionally, the divergence is stark — some markets are absorbing the correction quietly while Florida and Texas face genuine nominal price declines.
TL;DR - Prices at cycle low: The Freddie Mac HPI hit +0.7% YoY in March, a new cycle bottom, with McBride warning a negative print is possible later in 2026. - Regional fracture deepening: 29 states and 215 of 387 cities are below prior price peaks, with Florida and Texas metros leading the decline. - No near-term bounce: Flat YoY comps through spring and inventory-vs.-demand dynamics offer little upside cushion heading into summer. - Structural context: Erdmann's ongoing series ties today's soft prices to a longer arc of policy-driven supply constraint — the shortage that inflated prices is the same backdrop now shaping where corrections land hardest.
Compiled from 3 sources · 3 items
- Bill McBride (1)
- Kevin Erdmann (1)
- Brian Potter (1)