Thread by @nickgerli1

U.S. home value growth is entering recessionary territory in late 2025.

With Zillow's value index growing by only 0.1% over the last 12 months.

The previous times we've seen home value growth this low have mostly been associated with economic recessions. (like 2008, 1991, 1982, 1973).

This confirms the comments made earlier this week by Scott Bessent, that the housing market is in fact in a recession.

The question is: will national home values finally dip negative in 2026, and which cities will be the best places to buy next year?

To find out, go to reventure.app and sign up for premium to see our 12-month forecast for your ZIP code.

1) While many are frustrated that home prices are still near all-time highs, the reality is that a housing market trending towards 0% nominal home price growth is one already well into a recession, given how abnormally low this appreciation is.

In the last 55 years, it has only happened 5 times. 4 were recessions. And one was the mortgage rate shock in 2022.

2) We'll have to see if the broader economy follows suit. But even if it doesn't, it's reasonable to expect home values to continue dropping in many parts of the country in 2026 given high inventory, low demand, and sellers finally starting to give in.

3) Data from Realtor.com shows that inventory on a national basis is now nearly back to pre-pandemic levels at 1.1 million listings in October.

However, this isn't simply a return to "normal", as demand to buy is still 25% below pre-pandemic levels.

The result, a weakening housing market, where price growth is slowing and even going negative in 15 or so states.

4) To better understand this reality, consider the next graph, which shows existing home sales as reported by the NAR.

September registered a 4.06 million annualized figure, which is near the lowest level in the last 30 years, similar to the depths of the GFC downturn.

Showing just how much inertia there is in the market to buy right now, even with the Fed cutting rates.

5) Existing home sale chart going back to 1999.

Sales are down 40% from pandemic peak. And down 25% from normal.

No recovery to speak of yet, due to sky-high prices.

6) So we have sales near record lows, prices disinflating, inventory rising - all signs of a housing market recession, and one that is likely to produce price relief for buyers in 2026 if the current trends hold.

7) One additional "cherry on top" is the rental market.

Rents are also disinflating, and even going negative on new leases, another trend confirming a housing recession.

8) Invitation Homes, the largest publicly traded landlord in the U.S., just reported negative quarterly new lease rent growth in Q3 2025.

That was the first time new lease rent has gone negative in Q3 going back to 2017.

9) Negative rents on new leases is a disinflationary warning for the economy more broadly. Especially combined with disinflation home price growth. It suggests all corners of the market are slowing, likely due to a) excess supply build during the pandemic, b) a reduction in immigration, c) a slowing labor market, and d) still stretched affordability.

10) But here's the good news: you can take advantage of the housing recession as a buyer or investor and buy properties at discounts. In some states like Florida, these discounts are getting attractive.

To find the areas with the best long-term growth potential, where you can get the best deal over the next year, head to reventure.app and sign up for a premium plan to unlock our price forecast.