The U.S. housing market is undergoing a major shift as affordability becomes the primary driver of homebuyer decisions. According to the American Enterprise Institute (AEI) Housing Center, national home price growth slowed to just 1.1% year over year through February 2026, with forecasts pointing to modest price declines through 2028.
Markets that experienced the biggest pandemic-era price booms—particularly across the Sun Belt—are now seeing the sharpest corrections. Cities in Florida, Texas, Arizona, and parts of California are facing declining home values as higher mortgage rates, increased housing inventory, and affordability challenges reduce buyer demand. Cape Coral, Florida, recorded the nation's largest annual price decline at 9.6%.
Meanwhile, more affordable Midwestern and Rust Belt metros are gaining momentum. Cities such as Kansas City, Cleveland, Pittsburgh, Milwaukee, and Louisville posted some of the strongest home price growth over the past year as buyers seek lower-cost alternatives with better long-term value.
The report also highlights a growing buyer's market in many Sun Belt metros, where housing inventory has expanded significantly, giving buyers greater negotiating power. Analysts believe affordability—not migration trends alone—is now reshaping demand across the country.
As the market continues to normalize after the pandemic housing boom, experts suggest this "affordability economy" could redefine where Americans choose to live, with lower-cost regions emerging as the strongest performers in the years ahead.
Source: Fortune
