New ResiClub data shows 54 of the nation’s 300 largest housing markets posted year-over-year price declines as of August 2026, down from 68 in June. That’s real progress. But the 30-year fixed mortgage rate just climbed back above 7%, and that’s exactly the kind of shift that could leave builders losing revenue while they wait for the market to feel “right.”
Quick takeaways
- The count of declining major markets dropped to 54, down from 68 in June and 109 a year ago.
- Nationally, home prices are up 1.3% year-over-year, up from a flat reading a year ago, but that number still hides a split market.
- The 30-year fixed mortgage rate just climbed back above 7%, a shift that could slow or reverse the recent stabilization.
- Waiting for the “right” market window is a bet, not a strategy. Planning around your actual local conditions protects you either way.
Fewer markets are falling than they were in July
The correction has kept cooling, just not everywhere at once.
Back in July, we told you that 68 of the nation’s 300 largest housing markets were posting year-over-year price declines. That number is down to 54 now, or 18% of the 300 largest markets, according to ResiClub’s latest analysis of the Zillow Home Value Index, covering the 12 months ending August 2026. Nationally, prices are up 1.3% year-over-year, up from a flat -0.01% reading this time last year.
Here’s how that count of declining markets has moved over the past several years, per ResiClub’s data:
- August 2022 to August 2023 – 78 markets falling (26%)
- August 2023 to August 2024 – 39 markets falling (13%)
- August 2024 to August 2025 – 109 markets falling (36%)
- August 2025 to August 2026 – 54 markets falling (18%)
The softness hasn’t disappeared, it’s just concentrated. Zoom into the 50 largest metros and 21 of them, or 42%, are still negative year-over-year. That’s still a lot of markets working through a correction, even as the national count keeps improving.
The same Sun Belt markets are still absorbing the excess
Austin and Tampa haven’t finished working through their pandemic run-up.
The markets still posting declines are concentrated in largely the same places we flagged in July: Texas, Florida, and Colorado, along with other Sun Belt and Mountain West metros that ran hottest during the pandemic. Builders in these markets kept new supply coming even as demand cooled, leaning on incentives and price cuts to move inventory, which pulled buyers away from resale homes and piled even more supply onto that side of the market.
The metro-level numbers still make the point better than any explanation. Austin, TX now sits 27.6% below its 2022 peak. Hartford, CT sits 29.0% above its 2022 peak. Same country, same month, a 56-point spread between two metros.
Rates just complicated the recovery story
The 30-year fixed is back over 7%, and that changes the next few months.
The trend line on declining markets has been improving for three straight periods now, and that’s genuinely good news. But it was built on where rates and inventory sat before the 30-year fixed mortgage rate climbed back above 7% this month. As of September 22, the average 30-year conventional rate sat at 7.068%, per Fortune’s daily tracking of Mortgage Research Center data, and it’s been stuck in that range for weeks rather than pulling back. ResiClub’s own read is that the real test for the rest of 2026 is whether that rate move reignites the softening that had been fading, and even ResiClub isn’t calling the direction with confidence, its guidance is to watch local inventory closely over the next several months.
Waiting for the market to “settle” is its own risk
Market shifts aren’t a phase to wait out. They’re the baseline.
It’s tempting to read “fewer markets are falling” as a green light to finally move, or to read “rates just jumped” as a reason to hold off until they come back down. Both instincts cost money. A project that sits idle while a builder waits for the right market is lost revenue for every month it’s not moving, and the market has shifted meaningfully three times in the past 14 months alone: from 109 declining markets down to 68, then down to 54, now with a rate jump that could send it the other way. Underwriting a project around catching the market at its best moment means underwriting around a target that hasn’t held still since 2022.
The builders coming out ahead right now aren’t the ones who called the bottom. They’re the ones who kept a pipeline of deals underwritten to their own local conditions and moved when their numbers worked, whatever the national headline said that month.
What this means for your capital strategy
Where you build matters as much as when you think the market will turn.
Your pricing, your underwriting, and your exit timeline should reflect the metro you’re actually building in, not the national headline. A few things worth building into every deal for the rest of 2026:
- Know your metro’s actual numbers, not the national headline. A market posting 1.3% national growth can still have your specific metro sitting well below its 2022 peak, or well above it, and that’s the number that should shape your pricing and your exit plan.
- Build pricing flexibility into your pro forma from day one, especially in Sun Belt and Mountain West markets still absorbing excess supply.
- Don’t let a rate headline set your start date. The 30-year fixed has moved meaningfully three times in the past year, and a project timed around today’s rate is exposed to whatever it does next.
- Move on your numbers, not the market’s mood. Local inventory data is a more useful signal than a national trendline, and it updates faster than the headlines do.
None of this means the market is too unpredictable to plan around. It means the shifts are the constant, not the exception, and builders who plan around that instead of around calling the next turn keep moving while everyone else waits.
Frequently Asked Questions
Are fewer housing markets seeing price declines in 2026? Yes. 54 of the nation’s 300 largest markets posted year-over-year price declines as of August 2026, down from 68 in June and 109 a year earlier, according to ResiClub’s analysis of Zillow data.
Which states have the biggest home price corrections right now? Texas, Florida, and Colorado continue to see the sharpest pullbacks, concentrated in Sun Belt and Mountain West metros that saw the biggest run-ups during the pandemic boom.
Could rising mortgage rates reverse the recent stabilization? It’s possible. The 30-year fixed mortgage rate is averaging 7.068% as of late September, per Fortune’s tracking of Mortgage Research Center data, and it’s held above 7% for weeks. ResiClub flags that rate move as the key variable to watch over the next several months.
Should builders wait for the market to stabilize before starting a project? Waiting for a “better” market usually means waiting for a moving target. Underwriting to current local conditions, rather than trying to time a turn, keeps projects moving regardless of which way the national trend goes next.
Building with CoFi Lending
CoFi works with builders, developers, and brokers across a wide range of markets, and we structure financing around your project’s actual conditions, not a bet on where the market’s headed next. If you want to talk through how current conditions affect your next build, reach out to our team.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a commitment to lend, or a guarantee of specific loan terms. Actual rates, terms, and approvals depend on individual borrower qualifications, project characteristics, and market conditions.
