The March 31, 2026 update of the National Market Index, reflecting the most recently available data through February 2026, confirms that inflation-adjusted U.S. home values remain in a slow, controlled softening phase with no signs of systemic breakdown. The current HPI/CPI reading stands at 1.0171, representing approximately a 1.4 percent year-over-year decline in real terms. From the May 2022 national peak of 1.04133, inflation-adjusted prices have now declined roughly 2.3 percent, confirming that the market continues to work off excess valuation in a measured, orderly fashion. Despite this softening, the index remains 28.1 percent above its long-term historical average, underscoring that valuations are still historically elevated relative to pre-pandemic norms.
The January and February 2026 readings came in identically at 1.0171, suggesting the index has found a near-term floor and is moving sideways rather than declining further. This is consistent with a late-stage correction dynamic where affordability constraints continue to suppress transaction volume but limited inventory prevents a sharper repricing. Sellers remain largely discretionary. Distressed inventory is minimal. The adjustment is occurring through time and inflation rather than through abrupt nominal collapse.
Looking at the broader arc since 2000, inflation-adjusted home prices traded in a stable historical band near 0.60–0.80 for most of the pre-pandemic era before accelerating sharply during the 2020–2022 expansion. National home values have now increased approximately 231 percent on a nominal basis since January 2000, and roughly 71 percent on an inflation-adjusted basis — confirming a structural repricing of housing tied to chronic supply constraints, rising replacement costs, land scarcity in growth corridors, and sustained demographic demand.
The current correction cycle, which began after the May 2022 peak, has now extended 44 months. Over that span, real prices have declined just over 2 percent from peak. By comparison, the 2006–2012 correction produced a 35.2 percent inflation-adjusted decline over 71 months. The magnitude and velocity of today's adjustment remain materially smaller, reflecting a fundamentally different structural backdrop: stronger underwriting standards, minimal credit stress, historically high homeowner equity, and no forced liquidation dynamic.
Month-over-month movements throughout 2025 and into early 2026 have been modest, oscillating between small gains and small declines without a definitive trend in either direction. Volatility remains low. Elevated mortgage rates continue to suppress buyer purchasing power, but limited supply has provided a durable floor. The market is not in a housing crisis — it is in a prolonged phase of affordability-driven consolidation.
When comparing long-term national performance against the Austin area, the Austin market has closely tracked national appreciation over the full cycle since 2000 — both sitting near 222–231 percent nominal and 68–71 percent inflation-adjusted gains. Austin's trajectory through the 2020–2022 surge and subsequent normalization mirrors the national story, though local dynamics including population growth, tech sector exposure, and land constraints add additional layers to the local picture.
The February 2026 National Market Index confirms that the U.S. housing market remains in a late-stage real-price correction, not a systemic housing crisis. Prices have adjusted modestly from peak levels but remain historically elevated in inflation-adjusted terms. Affordability is the primary constraint on demand. Structural supply limitations continue to support a floor beneath valuations. Over the next twelve to twenty-four months, market direction will hinge on monetary policy trajectory, real wage growth, and the evolution of financing conditions. The liquidity-driven surge is over. The next phase will be defined by stabilization, selective entry opportunities, and long-term capital preservation for disciplined buyers and investors.
