VeroFORECAST Signals Slower Home Price Growth in 2026 as Affordability Constraints Persist

SANTA ANA, Calif.--(BUSINESS WIRE)--Today, Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its Q4 2025 VeroFORECAST^SM. The forecast projects an average-nationwide home price appreciation rate of 1.3% over the next 12 months.

VeroFORECAST evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value.

A defining characteristic of the U.S. housing market in 2025 was persistent unaffordability. Elevated mortgage rates, historically high home prices, a softening labor market, and broader economic uncertainty combined to keep many potential buyers on the sidelines. At the same time, many homeowners chose to pull their listings rather than accept price cuts, limiting available inventory. The result was a market marked by low sales activity, constrained supply, and continued upward pressure on prices.

Looking ahead to 2026, both housing supply and sales are expected to improve slightly from 2025 levels, keeping price gains modest. Affordability may improve slightly, as wage growth is projected to outpace home price appreciation in 2026. Even so, the affordability gap that has built up over the past several years will continue to weigh on demand, keeping many households from committing to a home purchase. Adding to the pressure, unemployment is projected to edge higher in 2026, further constraining purchasing power. While average mortgage rates should ease compared with 2025, a return to the ultra-low three to four percent range remains highly unlikely, with rates expected to hover above 6 percent for much of the year.

For buyers hoping 2026 would mark a turning point for affordability, the path to homeownership is likely to remain challenging. Even as the pace of price appreciation slows, a sharp correction is not expected. Rising insurance premiums and other ownership-related costs are also becoming increasingly important factors in purchase decisions. On the supply side, a large share of homeowners remains locked into low-rate mortgages, reducing the likelihood of a meaningful increase in listings and reinforcing the market’s slow-moving dynamic.

Beneath the national averages, however, local market conditions diverged sharply. Many pandemic-era boomtowns in the sunbelt have emerged as some of the weakest housing markets, as rapid price growth during the pandemic collided with today’s affordability constraints. In contrast, markets across the Northeast and Midwest, which avoided the most extreme run-ups in home prices, now appear relatively more affordable. As affordability pressures have spread nationwide, these regions have shown greater resilience, highlighting the increasingly bifurcated nature of the housing market.

The ten housing markets expected to perform the strongest over the next year are concentrated largely in the Midwest and Northeast. They include Rockford, Illinois; Buffalo and Rochester in New York; Norwich, Hartford, New Haven, and Bridgeport in Connecticut; Springfield, Massachusetts; Manchester–Nashua, New Hampshire; and Green Bay, Wisconsin. These metro areas stand out for their comparatively lower home prices and proximity to larger employment centers, a combination that continues to support steady demand in an otherwise constrained housing market.

Rank	Metropolitan Statistical Area	Forecast
1	ROCKFORD, IL	4.9%
2	BUFFALO-CHEEKTOWAGA, NY	4.4%
3	NORWICH-NEW LONDON-WILLIMANTIC, CT	4.4%
4	HARTFORD-WEST HARTFORD-EAST HARTFORD, CT	4.1%
5	NEW HAVEN, CT	3.8%
6	BRIDGEPORT-STAMFORD-DANBURY, CT	3.8%
7	ROCHESTER, NY	3.6%
8	SPRINGFIELD, MA	3.5%
9	MANCHESTER-NASHUA, NH	3.5%
10	GREEN BAY, WI	3.5%

The softest housing markets are concentrated largely in Florida, Texas, and Louisiana, where buyer interest has cooled significantly. In these areas, the cost of owning a home has climbed well beyond the purchase price alone, with rising insurance premiums, higher property taxes, and growing homeowners’ association fees weighing heavily on budgets. At the same time, a surge of new construction has added to available inventory, leaving sellers with more competition and fewer buyers. Together, these factors are placing downward pressure on home prices as signaled by the forecast.

Rank	Metropolitan Statistical Area	Forecast
1	CAPE CORAL-FORT MYERS, FL	-2.7%
2	AUSTIN-ROUND ROCK-SAN MARCOS, TX	-2.6%
3	SHERMAN-DENISON, TX	-2.1%
4	LAKELAND-WINTER HAVEN, FL	-1.7%
5	CRESTVIEW-FORT WALTON BEACH-DESTIN, FL	-1.5%
6	NAPLES-MARCO ISLAND, FL	-1.4%
7	NORTH PORT-BRADENTON-SARASOTA, FL	-1.4%
8	PANAMA CITY-PANAMA CITY BEACH, FL	-1.2%
9	PUNTA GORDA, FL	-1.0%
10	LAKE CHARLES, LA	-1.0%

VeroFORECAST Methodology

The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The current report is based on 326 Metropolitan Statistical Areas (MSAs) data, including 17,800 ZIP codes, 977 counties, and 82% of U.S. population covered. The report is a projected increase twelve months forward.

• Download the Q4 2025 – Q4 2026 VeroFORECAST results as a PDF infographic
• Download the 10 Strongest-Performing Markets graphic only

Source: Veros Real Estate Solutions (Veros®)

This information is intended for use by the media for economic reporting and should only be used for physical or digital publication or broadcast, in whole or in part, and must be sourced from Veros Real Estate Solutions. The company name must be visible on the screen or website if the data are illustrated with maps, charts, graphs, or other visual elements. For questions, analysis, interpretation of the data, or permission to reproduce, contact [e-mail].

About Reena Agrawal, Senior Research Economist

Reena Agrawal has a Ph.D. in Economics from Vanderbilt University. She has fifteen years of experience in macroeconomic forecasting, sectoral research, feasibility studies of complex projects, and preparing reports for multi-national clients.

About Veros Real Estate Solutions (Veros®)

A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros’ services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit www.veros.com or call 866-458-3767.