Reventure forecasts falling home prices across much of the South and West in 2027, according to a report published November 8, 2026. While many markets face declines, wealthy suburbs near New York City, San Francisco, and Chicago are still seeing rising values, some by double digits.
The housing market is experiencing a split, described as a K-shaped market. In the lower arm, markets in the South and West face declining prices due to heavy new construction, lower incomes relative to prices, and smaller down payments. Reventure identifies Tennessee, Colorado, and Washington as having the largest inventory surpluses, with supply as much as 50% above normal. Utah, Arizona, and Georgia also show large surpluses, with supply roughly 30% to 50% above normal. In contrast, the upper arm consists of supply-constrained, wealthy suburbs near major job centers where prices continue to rise.
Leading the country in home price growth are San Francisco County, California, with a 14.5% increase, the Western Connecticut Planning Region, and Westchester County, New York, with growth of about 7.5%. In Westchester County, home values in certain ZIP codes have risen roughly 9% to 12% over the past year. These markets benefit from limited new supply, proximity to New York City, and wealthy buyers who are less dependent on mortgages.
National demand has weakened significantly. The National Association of Realtors’ Pending Home Sales Index fell 7.3% in September 2026 to 66.0, the lowest reading since the index began in 2001. Additionally, the NAHB/Wells Fargo Housing Market Index fell to 29 in October, its lowest reading since June 2012. These shifts follow mortgage rates climbing above 7%, with the 30-year fixed rate averaging 7.40% in mid-October.
The Federal Reserve raised its benchmark rate to a range of 3.75% to 4.00% in September 2026, its first hike since 2023. While the Fed held rates steady in October, markets expect another hike in December. Reventure notes that raising rates into a market with weak demand poses a risk, as collapsing buyer demand can act as a deflationary force.
