Data from Reventure Consulting’s historical housing growth chart shows that the U.S. housing market is now entering recessionary territory in late 2025. The last time growth touched near-zero, home prices fell sharply in the following year — most notably during the 2008–2009 Global Financial Crisiswhen national home values plunged over 10% year-over-year. Before that, the 1991 Gulf War Recession saw values decline by roughly 3%while the early 1980s housing shock, triggered by 18% mortgage ratespushed growth down by nearly 6%.
Today’s market backdrop is strikingly similar. Mortgage rates remain elevated at around 7.5%affordability is at a 38-year lowand inventory has surged in many Sun Belt metros. Zillow data shows the average U.S. home value at $363,932up marginally from last year but far below the double-digit growth seen during the pandemic boom. Analysts note that housing markets in Phoenix, Austin, and Boise — once the darlings of the post-pandemic surge — are now showing flat or declining prices, while Midwestern metros like Cleveland, Milwaukee, and Chicago are holding steadier.
Inflation-adjusted home values have fallen 2.3% over the past year, signaling real erosion in household wealth. National housing stock value remains high at $55.1 trillionbut annual growth has collapsed from $6 trillion during 2021 to just $862 billion in 2025.
U.S. home value growth is entering recessionary territory in late 2025.
With Zillow’s value index growing by only 0.1% over the last 12 months.
The previous times we’ve seen home value growth this low have mostly been associated with economic recessions. (like 2008, 1991,… pic.twitter.com/aMnJlXzG7l
— Nick Gerli (@nickgerli1) November 5, 2025
The chart shows the year-over-year (YoY) home value growth from 1954 to 2025, based on Zillow ZHVI data from 2000-2025 and Case Shiller HPI from 1954-2000.
Key observations:The highest YoY growth peaks occurred around 1978-1980 (up to 16.2%), the late 2000s before the 2008 financial crisis, and a dramatic spike in 2021-2022 reaching almost 18.4%.The 1973 recession, 1982 high mortgage rate period (18%), and the 1991 Gulf War recession show noticeable dips.
The sharpest decline was during the 2008-2009 global financial crisis (GFC), dropping about -10% YoY.
Growth stabilized in the 2010s, with moderate fluctuations mostly between 2% and 8%.
Recently (2025), growth has sharply reverted downward to below zero, indicating a significant drop after the record highs in 2021-2022.
The key question now is whether home prices will turn negative in 2026. Zillow’s forecast projects only 1.9% nominal growth next yeareffectively flat when adjusted for inflation. If mortgage rates remain above 7%, analysts warn the next leg could tilt downward, particularly in high-cost coastal and Sun Belt regions.
The last time U.S. home value growth sat this low, the economy was already in contraction. The data now suggest the market’s soft landing may be slipping away.
Why are us home prices barely moving?
One of the biggest reasons for the housing slowdown is high mortgage rates. Borrowing costs have remained elevated, which discourages many potential buyers from entering the market. Fewer buyers naturally lead to slower price growth across the country.
Another factor is affordability strain. Home prices have outpaced income growth for years, making it difficult for many Americans to afford a home. Even those who can afford a down payment may hesitate due to rising interest payments, creating a bottleneck in demand.
Additionally, buyer activity is softening in several regions. While inventory hasn’t surged dramatically, fewer transactions mean that homes are staying on the market longer, and sellers are adjusting prices to attract buyers. This mix of high rates and cautious buyers is creating a pause in the market.
Finally, local variations are becoming more noticeable. Some metro areas still experience moderate growth, but many others see flat or slightly declining prices. This uneven pattern shows that the slowdown is not just nationwide but also highly regional.
Could this slowdown signal a bigger problem?
The current market resembles the conditions before the 2008 housing crash. Back then, growth started to slow, affordability worsened, and speculative buying began to fade. While we are not in a full crisis, these warning signs are worth noting.
Slowing growth may also affect the equity homeowners can build. For those planning to sell or refinance, stagnant or declining home values can limit financial options. Recent buyers, particularly those with higher mortgage rates, may find themselves in a less favorable position if the market stays flat.
Economically, a prolonged housing slowdown can ripple across sectors. Housing affects consumer spending, construction, and lending. If the market stalls for long enough, the broader economy could feel the impact, from slower retail growth to fewer construction jobs.
Investors and developers also need to pay attention. Success in this market is increasingly dependent on local fundamentals like employment trends, income growth, and housing supply rather than national trends alone. The days of uniform growth across the country appear to be over.
What factors could revive the housing market?
Mortgage rates are a key lever. If rates decline significantly, more buyers may re-enter the market, boosting demand and helping stabilize prices. Lower rates can make homes more affordable for a wider range of Americans, which could kickstart a modest rebound.
Inventory levels will also play a critical role. If more homes are available while demand remains weak, price growth could turn negative. On the other hand, limited supply in desirable areas could keep prices stable or even push them higher.
Regional factors will likely determine the winners and losers. Cities with strong employment growth, moderate home prices, and lower borrowing costs could continue to see positive price movements, while high-cost regions may face further stagnation.
Finally, policy changes could influence the market. Zoning reforms, tax incentives, or relaxed lending rules may encourage homebuilding or buying. However, these interventions may also create imbalances between renting and owningshaping who benefits from the next phase of housing growth.
What does this mean for homeowners and buyers?
For homeowners, equity growth is slowing. This is important for anyone looking to sell, refinance, or take out a home equity loan. A stagnating market means homeowners may not see the same gains they experienced in previous years.
Recent buyers could face challenges as well. Those who purchased at higher rates may find their homes aren’t appreciating quickly, making their mortgage payments relatively more expensive. This can lead to financial pressure and limited flexibility for families.
For potential buyers, this slowdown could be an opportunity. Flat or declining prices in certain regions might make homes more accessibleparticularly for first-time buyers who have been priced out for years. The key is being selective and focusing on areas with strong local fundamentals.
Investors should take a measured approach. With growth uneven, understanding local market dynamics and employment trends will be critical to making sound decisions in both buying and selling properties.
Will the housing market recover soon?
While there is no indication of a national collapse yet, the U.S. housing market is clearly entering a cooling phase. Home-value growth near zero is a signal that the market is taking a pause.
Right now, the average U.S. home costs $363,932but prices have barely moved. Mortgage rates around 7.5% are squeezing buyers, while sellers are stuck waiting. Inventory is rising, especially in Sun Belt cities that boomed during the pandemic — think Phoenix, Austin, and Boise — and now they’re cooling fast.
Whether this pause turns into a larger downturn depends on several factors: interest rates, supply, demand, and income growth. Structural challenges like affordability and rising construction costs may also shape the next stage of the market.
For homeowners, buyers, and investors, staying informed and monitoring local trends and national economic signals will be essential. The housing market is no longer uniformly booming, but there are pockets of opportunity for those who look carefully.