National Market Index – Updated February 24, 2026 (Reflecting December 2025 Data)

The February 24, 2026 update of the National Market Index, reflecting finalized December 2025 data as a lagging indicator, confirms that inflation-adjusted U.S. home values continue to soften, but in a measured and controlled manner. The latest closed HPI/CPI reading stands at 1.0184, representing a 1.3 percent year-over-year decline in real terms. From the May 2022 national peak of 1.04138, inflation-adjusted prices are now roughly 2.2 percent lower, indicating that the market has worked off a portion of excess valuation without entering a disorderly correction. While prices have retreated modestly from peak levels, they remain 27.2 percent above the long-term historical average, underscoring that valuations are still elevated relative to pre-pandemic norms. December now represents the most recent fully closed monthly dataset and serves as the appropriate benchmark for forward comparison.

From 2000 through 2020, inflation-adjusted home prices generally traded in a contained historical range before accelerating sharply during the 2020–2022 expansion. The 2000 annual average sat near 0.608 and remained under 0.80 for much of the pre-pandemic era. Today’s level near 1.02 confirms that the market remains well above historical equilibrium even after more than three years of normalization. In real terms, national home values are now roughly 70 percent higher than in January 2000 when adjusted for inflation. This reflects a structural repricing of housing tied to chronic supply constraints, higher replacement costs, land scarcity in growth corridors, and long-duration demographic demand rather than a short-term distortion.

The current correction phase, which began after the May 2022 peak, has now extended approximately 43 months. Over that span, real prices have declined just over 2 percent from peak. By comparison, the 2006–2012 downturn produced a 35.24 percent inflation-adjusted decline over 71 months. The magnitude and velocity of the current cycle remain materially smaller. The structural backdrop is fundamentally different. Today’s adjustment is being driven by affordability compression and restrictive monetary policy rather than credit stress, speculative leverage, or forced liquidation. Homeowner equity levels remain historically high, underwriting standards are stronger, and distressed inventory is minimal. Sellers remain largely discretionary, which limits cascading price pressure.

Price behavior throughout 2025 reinforces this interpretation. The index began the year at 1.0320 in January and gradually eased through mid-year before stabilizing near 1.0184 in December. Month-over-month movements have generally been modest, with oscillations between slight gains and slight declines rather than sharp contractions. Volatility remains low. There are no signs of systemic breakdown. Elevated mortgage rates continue to suppress transaction volume and constrain buyer purchasing power, but limited inventory has prevented a deeper repricing. The market is adjusting through time and inflation rather than through abrupt nominal collapse.

When comparing long-term performance, national home prices have increased approximately 231 percent since January 2000 on a nominal basis. On an inflation-adjusted basis, the increase since 2000 is roughly 70 percent nationally. This confirms that housing has undergone a structural repricing over the past quarter century. The excess froth from 2021–2022 has been partially removed, but the broader baseline remains elevated relative to pre-pandemic conditions.

The December 2025 National Market Index confirms that the U.S. housing market remains in a late-stage real-price correction, not a systemic housing crisis. Prices have adjusted modestly from peak levels but remain historically elevated in inflation-adjusted terms. Affordability remains the primary constraint on demand. Structural supply limitations continue to provide a floor beneath valuations. Over the next twelve to twenty-four months, market direction will hinge on monetary policy, real wage growth, and financing conditions. The liquidity-driven surge is over. The next phase will be defined by stabilization, capital preservation, and selective entry opportunities for disciplined buyers and long-term investors.