Is the Housing Market Crashing? Here's What the New Data Shows

Scroll through your YouTube or X feed long enough, and you’ll no doubt see at least one dommer warning of an imminent housing crash. Some of them sound so convincing, too. 

But the data on today’s housing market shows something completely different. 

Home prices climbed 2.1% across the country over the past year. I’m looking at where prices are rising the fastest, at the state and city levels, and where they’re falling. And the National Association of Home Builders (NAHB) put out some maps that show exactly what’s going on.

What's Happening to Home Prices Right Now

According to the Federal Housing Finance Agency (FHFA), home prices are up 2.1% nationally compared to a year ago.

This is a little faster than the pace at the start of the year.

Prices also rose 0.3% since the first few months of this year. This slower pace suggests the market is settling into a steadier rhythm.

Home prices have gone up every single quarter since 2012. Even with higher mortgage rates and cost pressures over the past few years, prices have kept climbing in most of the country.

States Where Home Prices Are Rising (or Falling) the Fastest

Some states are seeing much bigger gains than others. Here are the ten states with the strongest price growth over the past year:

1. Alaska: up 8.3%

2. Vermont: up 7.3%

3. Hawaii: up 5.8%

4. Illinois: up 5.6%

5. West Virginia: up 5.6%

6. Wisconsin: up 4.8%

7. North Dakota: up 4.8%

8. Connecticut: up 4.7%

9. Rhode Island: up 4.7%

10. New Jersey: up 4.6%

A lot of these states are in the Midwest or Northeast, where there aren't enough homes for sale to keep up with buyer demand, and that keeps prices climbing.

Home prices fell in four states over the same year:

1. New Mexico: down 1.2%

2. Washington: down 0.9%

3. Colorado: down 0.5%

4. California: down 0.2%

A handful of other states, including Oregon, North Carolina, Texas, Mississippi, and Arizona, saw prices grow by less than 1% for the year. Many of these are the same markets that saw explosive growth during the pandemic, and they're cooling off now.

Cities Where Home Prices Are Rising (or Falling) the Fastest

City-level numbers show even bigger swings than the state data. Here are the ten cities with the biggest price gains over the past year:

1. Elgin, IL: up 7.7%

2. Allentown-Bethlehem-Easton, PA-NJ: up 7.0%

3. Bridgeport-Stamford-Danbury, CT: up 6.6%

4. Charleston-North Charleston, SC: up 6.5%

5. El Paso, TX: up 6.5%

6. Milwaukee-Waukesha, WI: up 6.1%

7. Chicago-Naperville-Schaumburg, IL: up 5.9%

8. New York-Jersey City-White Plains, NY-NJ: up 5.6%

9. Newark, NJ: up 5.5%

10. Greensboro-High Point, NC: up 5.3%

Some of these cities sit in states that didn't make the state-level top ten, which shows how much prices can vary within a single state.

These ten cities saw the biggest price drops over the same year:

1. Everett, WA: down 3.7%

2. San Antonio-New Braunfels, TX: down 3.0%

3. Bakersfield-Delano, CA: down 2.6%

4. Seattle-Bellevue-Kent, WA: down 2.4%

5. San Francisco-San Mateo-Redwood City, CA: down 2.4%

6. Tucson, AZ: down 2.2%

7. Albuquerque, NM: down 1.7%

8. San Jose-Sunnyvale-Santa Clara, CA: down 1.6%

9. Washington, DC-Maryland: down 1.0%

10. Denver-Aurora-Centennial, CO: down 1.0%

A lot of these cities are in the West, in some of the same markets that saw the fastest growth a few years ago.

Some cities look very different depending on the time frame you use. San Francisco's prices dropped 9.1% compared to the previous few months, even though its year-over-year drop was a smaller 2.4%. Short-term numbers can jump around a lot, so the year-over-year comparison gives a better sense of what's happening.

Why Some Markets Are Heating Up and Others Are Cooling Off

Two things are driving most of what we're seeing in this data.

#1. Affordability

Buying a home costs more than it used to, and that's pricing some buyers out or pushing them to wait. This is most visible in expensive markets like California and parts of the Pacific Northwest, where prices have already climbed a lot over the past several years.

#2: Housing supply

In a lot of Midwest and Northeast markets, there aren't enough homes for sale to meet buyer demand. When supply is tight, prices tend to hold steady or keep climbing.

This helps explain why states like Illinois and Wisconsin keep appearing near the top of the growth list. States like Oregon and Arizona are dealing with a different set of pressures. Prices climbed fast in these places during the pandemic, and affordability still hasn't caught up.

What This Means for our local markets in Livingston and Millburn/Short Hills

In Livingston, average sale prices YTD (through August 2026) have gone up by 6% from the same time last year. In Millburn/Short Hills, average sale prices YTD have gone up by 14% from the same time last year.

If you're selling in these markets, knowing whether prices are climbing or slowing down here can help you set the right asking price and choose the best time to list. 

If you're buying, this same data can help you understand whether you're negotiating in a market that favors you or one where you'll need to move fast.

No home price story looks exactly the same from one house to the next, even within the same city. Your street, your school district, and your type of home all play a role in your home's current value.