National Market Index – Updated January 27, 2026 (Reflecting November 2025 Data)

The January 27, 2026 update of the National Market Index, reflecting finalized November 2025 data as a lagging indicator, confirms that inflation-adjusted U.S. home values continue to soften at a controlled and deliberate pace. The latest closed HPI/CPI reading stands at 1.0167, representing a 1.3 percent year-over-year decline in real terms. From the May 2022 national peak of 1.0412, inflation-adjusted prices are now approximately 2.35 percent lower, indicating that the market has absorbed a meaningful portion of its excess without entering a disorderly correction. While prices have retreated modestly from peak levels, they remain 27.3 percent above the long-term historical average, underscoring that valuations are still elevated relative to pre-pandemic norms. Interim composite readings published during late 2025 reflect partial revisions, but November represents the most recent fully closed monthly dataset and remains the appropriate benchmark for comparative analysis.

From 2000 through 2020, inflation-adjusted home prices generally traded within a narrow band between 0.60 and 0.80. 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 approximately 70.7 percent higher than in January 2000, reflecting a structural repricing of housing driven by long-term supply constraints, rising construction and land costs, and persistent demand concentration in economically resilient regions. This shift represents a higher baseline cost environment rather than a temporary distortion tied solely to pandemic-era stimulus.

The current correction phase, which began after the May 2022 peak, has now extended roughly 42 months. Over that span, real prices have declined just over 2 percent, a stark contrast to the 35.24 percent inflation-adjusted decline over 71 months experienced during the 2006–2012 housing downturn. This comparison highlights the fundamentally different nature of the current cycle. Today’s adjustment is being driven by affordability normalization and tighter monetary conditions, not by credit stress or forced liquidation. Elevated homeowner equity, stronger underwriting standards, and the absence of widespread distressed inventory have collectively prevented the cascading price declines seen during the Great Recession. Most sellers remain discretionary, choosing to delay transactions rather than capitulate on pricing.

Price behavior throughout 2025 reinforces this interpretation. The index began the year near 1.032 and gradually eased toward 1.0167 by November. Month-over-month movements have largely oscillated between flat and modestly negative readings, signaling deceleration rather than acceleration in the correction. Volatility remains low, and there are no indicators of systemic instability. Elevated mortgage rates continue to suppress transaction volume and cap buyer purchasing power, but constrained inventory has limited downside pressure on prices. The result has been a slow erosion of real value through time rather than abrupt nominal declines.

Austin remains closely aligned with national trends when evaluated on an inflation-adjusted, long-term basis. Since January 2000, Austin-area home values are up approximately 68.3 percent, compared with 70.7 percent nationally. Austin’s sharper normalization reflects the magnitude of its 2020–2022 expansion rather than a structural divergence. While prices remain well above pre-pandemic levels, the depth of the local correction has reintroduced negotiation leverage and expanded buyer opportunity to a degree not seen in several years. Buyers benefit from increased selection and pricing discipline, while sellers must lead with precision, strong presentation, and realistic expectations. Investors should prioritize durability, cash flow resilience, and long-term fundamentals over speculative appreciation.

The November 2025 National Market Index confirms that the U.S. housing market is progressing through a late-stage, real-price correction, not a systemic crisis. Prices have adjusted downward from peak levels but remain historically elevated, and affordability constraints continue to limit demand. Structural supply limitations have provided a price floor, preventing a deeper drawdown. Market performance over the next twelve to twenty-four months will depend largely on monetary policy direction, wage growth, and consumer confidence. The era of liquidity-driven acceleration has ended. The next phase will be defined by stabilization, preservation of equity, and selective opportunity, particularly in markets like Austin where price normalization has advanced further and created more actionable entry points for disciplined buyers and long-term investors.