Will Home Prices Go Down?

Sorry, my crystal ball is in the repair shop, so I don’t know for sure. And no one else does either. That said, I don't think that prices will go dramatically in either direction. And for buyers with a 5-7 year horizon, a short-term price dip matters much less than people expect.

Here's how I think about it with my own home purchases.

What Would Have to Be True for Prices to Drop Significantly

Major, sustained home price declines require specific conditions. The 2008-2012 crash had all of them: widespread subprime lending to unqualified borrowers, extremely loose underwriting standards, mass speculation, and a financial crisis that destroyed employment and credit access simultaneously.

Current conditions are different in important ways:

• Lending standards are significantly stricter. Buyers today are more qualified than buyers in 2006. 20 years ago, all you basically had to do was fog a mirror to get a loan.

• Most current homeowners have substantial equity. A homeowner with 40% equity doesn't sell at a loss unless forced to. Foreclosure-driven price collapses require homeowners who can't afford to hold.

• Housing supply remains constrained in most markets. The inventory problem that drove 2020-2022 appreciation hasn't been fully resolved. Basic economics, right? Low supply with no equal decrease in demand means that prices stay elevated.

• Demographic demand is real. Millennials are in peak home-buying years. That's not going away.

None of this makes a price correction impossible. Corrections happen. In fact, we’re seeing a little of that in Charlotte right now (2026). Markets and neighborhoods that appreciated dramatically on speculation rather than fundamentals are more vulnerable than others. But a 2008-style crash requires conditions that just aren’t there.

Markets That Are More vs. Less Vulnerable

Markets more vulnerable to price softness: areas that appreciated dramatically on speculation, vacation and resort markets with high investor concentration, markets where local employment is concentrated in a single industry facing disruption.

Markets more protected: cities with diversified economies, strong in-migration, employment growth, and genuine undersupply. Charlotte fits this profile reasonably well.

• Between July 1, 2024 and July 1, 2025, the Charlotte Region saw a net gain of 135 people per day. This is spread out among all the region’s counties, showing a confidence in the Charlotte Region as a whole.

• The Charlotte Region has expanded and diversified it’s business and economic foundation. Charlotte is home to 19 Fortune 1000 Companies in industries ranging from manufacturing, utilities, financial to tech and so much more. This diverse economic base provides more stability for the region should something happen to one specific business sector.

• The Charlotte Region has seen a 14% labor force growth since 2020, 25% growth in business and finance jobs, and 21% growth in professional, scientific, and technical services industry roles in the same timeframe. This growth is encouraging for the long term stability of Charlotte as a city and for the housing market.
  
  

Population growth, corporate investment, and limited land supply in the region and the urban core specifically have created conditions that don't disappear overnight.

What History Shows

Home values in most US markets have been higher at the end of any 10-year period than at the beginning, including periods that started at what felt like peaks. Buyers who purchased at the peak of 2006 and held through the crash were largely whole by 2016-2017 in most markets.

The buyers who got hurt in 2008 were the ones who had to sell during the trough, who were overleveraged with adjustable rates that reset, or who bought properties that fundamentally didn't make financial sense at any price. Buyers who could hold on held on and didn’t lose money in the end. You only lose when you sell, and if you don’t have to sell at a loss, then why would you?

The Waiting-for-Lower-Prices Calculation

Let's say you're waiting for a 10% price correction on a $325,000 home. That's $32,500 in savings if it happens.

While waiting 18-24 months for that correction: you pay rent at $1,800/month ($32,400-$43,200). You miss any appreciation that occurs before the correction. And if the correction doesn't come, you've paid the rent with nothing to show for it.

Even if a 10% correction does happen, you need it to happen quickly enough that your rent payments don't eat the savings. In most realistic scenarios, a modest correction doesn't save you as much as staying-put-and-buying looks like it would have.

Buy Based on Today's Numbers

This is the most important reframe in the whole conversation. Don't panic buy a home based on the assumption that prices will keep going up. Don't avoid buying based on the assumption that prices will come down. Buy based on whether the home makes financial sense at today's pricing, with today's rate, given your income, your down payment, and your 5-7 year timeline.

That's the only number you actually know. The future is never certain, so don’t make huge financial decisions based on what might happen.

In Charlotte, I tell buyers this regularly: if the home works at today's price and rate, own it. If prices go up, great. If they soften temporarily, you hold and they recover. If rates drop, you refinance. The financial resilience comes from buying within your means with a long enough timeline. That's the only logic that actually works.

FAQ

Should I wait for a 10-15% price drop before buying?

No. In most markets that would require conditions that aren't currently present. And the cost of waiting (rent paid and appreciation missed) often exceeds the savings from a correction that might or might not come. Run the actual numbers for your situation.

Are prices going to keep rising?

In markets with real demand fundamentals, probably yes over a 5-10 year view, but not at the 20% per year pace of 2020-2022. More normalized, modest appreciation is a more reasonable expectation. A normal, healthy market appreciates in the 2%-4% per year range.

What happens to prices when rates drop?

Historically, when rates fall materially, buying power increases, demand spikes, and prices often rise due to the increased demand from more buyers being able to afford the property. The rate savings get partially offset by price increases, and bigger cash reserves becomes crucial in winning in that market. This is why 'wait for lower rates and buy cheaper' doesn't always work as expected. But if you buy with today’s prices and rates, you’ll be able to refinance if/when that rate cut happens, which makes it a win-win for you!

I'm Laura Shinkle, your Realtor® in Charlotte, NC. If you're trying to figure out whether the timing makes sense for your situation, that's a conversation I'm happy to have. 828.575.6067 or [email protected].