Will Home Prices Drop in 2026? A Veteran Buyer's Guide

Are Home Prices Going to Drop in 2026? What It Means for VA Buyers

Higher rates and a calmer market have a lot of people expecting prices to fall. Here is what the numbers actually show, and how veteran buyers and sellers should plan around them.

Key Takeaways

National data still shows modest price growth, not a broad drop.
Low locked-in mortgage rates keep many owners from selling, which holds supply tight.
Buyers get less competition and more room to negotiate, not a crash.
For VA buyers, waiting for a price drop can cost more than it saves.

Cooling Off Isn't the Same as Prices Falling

If home prices were really going to come down, wouldn't we be seeing it clearly by now? Mortgage rates have been higher for a while. Inventory has improved in some areas, and buyers aren't bidding the way they were a few years ago.

That has a lot of people thinking this has to be the year prices finally fall. The market has shifted and things have cooled from the frenzy. But cooling off and prices coming down are two very different things.

“Cooling off and prices coming down are two very different things.”

What the National Data Actually Shows

National data still shows prices slightly higher than a year ago. The Federal Housing Finance Agency's House Price Index continues to show year-over-year gains. Zillow's Home Value Index shows modest growth, and Redfin's 2026 forecast projects about 1% price growth nationally.

That's much slower than the run-up during the pandemic, but it's still growth. When people talk about a crash, they usually picture broad declines across the country, and that's simply not what the data shows right now.

Why It Feels Like Prices Should Be Falling

Affordability is tight. Rates are higher, payments are larger and buyers are more cautious. But higher rates also locked many homeowners into very low mortgages from a few years ago.

A lot of people are sitting on 3% loans, and moving today would mean jumping to 6 or 7%. So fewer owners are willing to sell, which has kept inventory from rising as much as expected. When supply stays tight, softer demand isn't always enough to push prices down.

What This Means for Buyers and Sellers

What we're seeing is a more balanced market. Buyers are more careful, sellers are more realistic, and neither side is desperate. Markets typically don't crash when both sides stay relatively stable.

For buyers, that means you may not see a dramatic drop in prices, but you may see less competition, more choices and more room to negotiate. For sellers, pricing and presentation matter much more than they did a few years ago. Well prepared, realistically priced homes are still selling at stable values.

And remember, real estate is always local. What's happening across the country can look very different from what's happening here in Portland and SW Washington.

Redfin 2026 national forecastAbout 1%Projected price growth

Many existing mortgagesAbout 3%Locked in a few years ago

Today's rates6 to 7%Why owners stay put

VETERAN NOTES

What a Flat Price Market Means for Veteran Buyers and Sellers

Waiting Has a Cost

If prices hold steady while you wait, you keep paying rent and you don't build equity. With no down payment required for eligible buyers with full entitlement, many veterans can buy sooner than they think.

Use the Room to Negotiate

With less competition, a VA buyer can ask for help with closing costs. The VA caps seller concessions at 4% of the home's reasonable value, and the buyer's normal closing costs paid by the seller don't count toward that 4%.

Look for Assumable VA Loans

Some homes for sale carry a low-rate VA loan a qualified buyer may be able to assume with lender approval. That can mean a much lower payment than a new loan at today's rates.

Selling Veterans: Price It Right

In a balanced market, overpriced homes sit. Veteran sellers save 20% or 25% on the listing fee through our Veteran Seller Advantage, and a realistic price on day one protects your net.

See Homes With Assumable VA Loans Talk Through Your Timing

Questions Veterans Ask

Should I wait for prices to drop before using my VA loan?

The national data doesn't show a broad drop coming. Waiting usually means more rent and no equity, so it's worth comparing your real numbers today against waiting.

Can I negotiate closing cost help as a VA buyer right now?

Often, yes. With less competition, sellers are more open to requests. The VA limits seller concessions to 4% of reasonable value, and normal closing costs paid by the seller are separate from that cap.

Is Portland following the national trend?

Not always. Real estate is local, and each neighborhood and price range can move differently. Our market reports show what's happening in your area.

Want to Know What 2026 Means for You?

I'm Troy Doty, a Marine Corps veteran and Principal Broker with 25 years and 1,000+ homes sold across the Portland metro and SW Washington. Let's look at your specific market and your VA buying power, then build a plan that makes sense for your timeline.

Schedule a Call 503.997.4169

Portland Veteran Homes is a private, veteran owned real estate company and is not affiliated with the U.S. Department of Veterans Affairs. Information is general and not legal, tax or lending advice.