When will US housing costs return to normal?
A new analysis from Zillow found that newly built homes are selling for a lower median price per square foot than existing homes nationwide, driven largely by increased inventory and builder incentives in key Sun Belt markets. https://t.co/p9BiScqJaw
— Mortgage Professional America Magazine (@MPAMagazineUS) September 30, 2026
West Coast and Sun Belt: closest to housing cost recovery
San Jose, California, is the metro nearest to its 2018 cost norms, with home prices down 3.2% year over year and projected wage growth of 6.5%, driven by the Bay Area’s technology sector.
At the report’s 7.5% rate scenario, normalization in San Jose could arrive by October 2027.
Austin, Texas, and Oakland, California, follow closely, with Seattle, Washington, and Portland, Oregon, rounding out the top five.
All five share a combination of price softening and above-average income growth that most interior markets cannot currently match.
Northeast and Midwest face a decade-long affordability wait
Roughly half the metros Redfin analyzed could take 10 or more years to normalize. The Northeast and Midwest – New York, Chicago, Boston and Philadelphia among them – face the steepest path, with above-average price growth outpacing any expected rate relief.
