Home Prices Have Fallen for 15 Straight Months — but Buyers Still Can’t Afford One
Real home prices have dropped for over a year, yet buyers are somehow worse off than before the decline began. The reason has nothing to do with the price of the house.
The typical American home is getting cheaper in real terms. In late 2026, it is less affordable than historical averages across most of the country. National home values rose 2.1% in the year ending August 2026, according to the S&P CoreLogic Case-Shiller index released October 27. Consumer inflation ran at 3.4%, so home values have now fallen in inflation-adjusted terms for 15 consecutive months.
Five days earlier, ATTOM published its third-quarter affordability analysis. Homes were less affordable than their historical averages in 570 of the 583 counties it studied, or about 98%. In 467 counties, or 80.1%, the estimated monthly cost of owning a median-priced home topped the affordability guideline based on typical local wages.
Frustrated buyers have long been told to wait for prices to fall. That advice has run its course. The price of money has replaced the price of the house as the binding constraint.
Cheaper Houses, Costlier Money
ATTOM’s national median home price fell 2% year over year, from $375,000 to $368,000. ATTOM’s model assumes a 20% down payment and adds property taxes and insurance to the mortgage. On a 30-year loan, a modest rise in the interest rate can offset a discount that size.
Financing costs moved the wrong way. The 10-year Treasury yield, the benchmark mortgage rates follow, stood at 4.99% on October 27, up 0.98 percentage point from a year earlier. It hit 5.31% on October 5, after sitting as low as 3.97% in late February. The sticker discount was smaller. For a buyer who held off from spring to fall in hopes of a better price, the interest bill was much bigger.
Paychecks help only a little. Average hourly private-sector earnings reached $37.81 in September, up about 3.0% from $36.70 a year earlier. That is slightly faster than home prices are rising, but the bond market sets the interest bill, and wages have no say in it.
Supply Relief Keeps Slipping Away
Builders are pulling back. Housing starts fell to an annualized 1.22 million in September, down 7.4% from a year earlier. Existing home sales ran at a 3.99 million annual pace, down 2.2% year over year and well under the 4.5 million level that marks a healthy market. Few homes change hands, so inventory remains thin, and prices hold up even as the number of buyers shrinks.
Local data from the Federal Housing Finance Agency show how uneven the picture is. Prices in Brunswick-St. Simons, Georgia, fell 4.9% over the past year, and Boulder, Colorado, slipped 2.26%. Austin is up just 0.34%. Longer-run gains remain large in some markets: Atlantic City is up 68.91% over five years.
Who Pays and What to Watch Next
The biggest losers are first-time buyers, along with the renters stuck behind them, whom a hard market is squeezing as well. Homebuilders come next. Incentives, smaller floor plans, and price cuts keep sales moving but cut into margins, while mortgage lenders and home-improvement retailers depend on transaction volume, and that volume has stalled.
The 10-year yield matters most right now. If it settles back toward February’s sub-4% range, falling real prices would finally show up as lower monthly payments. ATTOM’s fourth-quarter county count would start to shrink. If it remains near 5%, another quarter of falling real prices will do little for buyers, and after that, look at the next Case-Shiller release. The August index already slipped 0.2% from July, the first sign that weak demand may be starting to pull down nominal prices too.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
