Eisenga Forecasts 25–45% Home Price Drop, Says Market Entering ‘Prolonged Adjustment’

 

COLUMBUS, Wis.— The U.S. housing market is bracing for what could be its steepest correction in more than a decade, as swelling inventories, slumping demand, and rising distress signals point to years of declining prices, according to a stark new outlook from Michael Eisenga, CEO of First American Properties.

“Home prices across the nation are entering a prolonged period of downward adjustment,” said Eisenga. “What we’re seeing is not just a temporary slowdown—it’s the beginning of a broader recalibration that could last for years.”

Michael Eisenga

Housing inventory has jumped nearly 30% year-over-year, while transaction volumes have hit record lows during what are typically peak sales seasons, indicating softening demand, Eisenga said.

Distressed and motivated selling are on the rise. An increasing number of homeowners, including those previously holding out, are now listing their properties amid rising delinquency rates reminiscent of pre-2008 indicators. There are projected home price declines, Eisenga said.

A national average decline of approximately 5% is expected by early 2026 if current conditions persist, Eisenga noted.

Longer-term, cumulative declines could reach 25–45% over the coming years before the market stabilizes, he said.

Eisenga said industry forecasts suggest a broad 9% drop in home prices next year, with certain high-growth regions potentially seeing sharper corrections.

With rate buydown programs expiring and growing burdens from taxes and insurance, more households face financial strain, pushing some toward foreclosure or urgent sales, Eisenga added.

Markets in Florida, Texas, and parts of California face excessive inventory, worsening the imbalance between supply and demand. Demographic pressures and investor dynamics, aging Baby Boomers offloading properties, combined with increasing institutional ownership, are reshaping the housing landscape—reducing affordability and traditional entry points for first-time buyers, Eisenga said.

Eisenga emphasized the U.S. housing market is undergoing a structural correction—not merely a cyclical dip.

“This is may not end up being 2008 all over again, but it’s not a soft landing either,” he added. “Stakeholders across the board, whether buying, selling, or lending must remain cautious and prepare for sustained headwinds.”