Home Prices To Drop In Half From Here? | Melody Wright

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**Melody Wright** (0:45)
I think, Adam, we're going to correct all the way to a point where household median income matches the median home price, and so that is going to be worse than 2008 This could devolve a lot faster than last time, and so that could be interesting, but yes, worse.

**Adam Taggart** (1:07)
Okay, and for prices to fall to match or come in historic alignment with median incomes, finger to the wind, what type of percentage decline is that from where we are right now?

**Melody Wright** (1:22)
It's going to be near your 50%, you know, and much greater in certain areas.

**Adam Taggart** (1:34)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Contagion has been the trend of the US housing market this year, as rising inventory and weakening prices have spread to more and more metros. How bad has it become? Well, Zillow just revealed that its data shows that 53% of all US homes lost value over the past 12 months. That's the most since 2012 As we're now poised to enter into a new year, should we expect the situation to get better or worse in 2026? Well, to make sense of it all for us, we're fortunate to welcome housing analyst Melody Wright back to the program. Melody, thanks so much for joining us today.

**Melody Wright** (2:14)
Thank you so much for having me. It's my pleasure.

**Adam Taggart** (2:17)
I very much appreciate it. And you're doing me a real solid here. We're recording this over the weekend, right before Thanksgiving week. You've been on the road. I very much appreciate you making the time for the Thoughtful Money audience. But I already know you have a heart of gold. So it's not surprising, but it's still appreciated.

**Melody Wright** (2:33)
Thank you so much.

**Adam Taggart** (2:34)
All right. Well, look, I just mentioned that big stat, which is the one that really made me think to reach out to you this week, Melody, that Zillow, you know, who is... They try to be, I think, as impartial as they can be. But I think we know they've sort of been cheering on, you know, the bull market and housing until recently, that they have admitted that, you know, now the majority of US homes have lost value over the past 12 months. I recall from our previous conversations this year, you were one of the first housing analysts to say that or predict that 2025 will be the first year in a good while where national housing prices will actually decline on average over the year. First off, how is that prediction doing? I know we've got over half the houses have lost value, but are we actually on track for a national average housing price decline this year?

**Melody Wright** (3:29)
Yeah, so it's a little tricky. If you look at the National Association of Realtor Series, I don't know that we'll get there, but I think we might get there in Case Schiller, which is that series looks at recorded sales.
So it's hard to say, but you can certainly see the deceleration happening in home prices. And where we'll also get there, Adam, of course, is on the new home side. So that will be very clear. But the biggest problem, and one thing, and I'm not going to get too excited, because last year in December, we really saw sales kind of rev up. And so I had hoped that would carry through 2025, so that more people would want to transact in the market. Instead, as rates kind of went up again, the market just froze. And then we had kind of the April terror, you know, tariff terror or whatever. I think people got really cold feet. And so sales slowed down again. And so we aren't having enough transactions to really influence that median home price in the NAR series, because it's only those higher price homes that are transacting, like really higher price. Like you can see year over year, the increases are always in the 1 million plus category, or the 75,000 to 1 million. And so what you've got again is something we talk about all the time, the bifurcated housing market. But the majority of folks transacting are in those upper tiers. So your median is going to be higher. However, what I've been seeing over the last three months, and this is why I get into the dirty, dirty details, is underneath the covers that 100 to $250,000 sales price, we're starting to see incremental increases in sales in that category. And so as that continues, we'll start to drag the median down, and it's happening already, and that's what you're seeing, the deceleration. And so that's a very long answer that I think people are going to end the year sort of, it'll probably be around flat, slightly down. But as Zillow said, you know, the values are down. It's just that we're not transacting, we're not selling them. And so we're not realizing those impacts.