🏡 96 U.S. Housing Markets See Falling Home Prices: What It Means for Buyers, Sellers & Investors in 2025

🏡 96 U.S. Housing Markets See Falling Home Prices: What It Means for Buyers, Sellers & Investors in 2025

Home prices are declining in 96 of the top 300 U.S. housing markets. See which cities are impacted, what’s driving the shift, and how KW Default Solutions helps agents navigate the change.

 
📉 One-third of major U.S. housing markets are now posting year-over-year price declines, according to the latest Zillow Home Value Index (May 2025). That’s 96 metro areas—up from just 10% back in January.

This growing trend reflects a cooling market that continues to adjust post-pandemic, especially in regions where inventory levels are rising and affordability has become stretched.

 
📊 Key Stats from the Zillow Home Value Index:
🏙️ January 2025: 31 of 300 markets (10%) saw YoY price drops
🏙️ February 2025: 42 markets (14%)
🏙️ March 2025: 60 markets (20%)
🏙️ April 2025: 80 markets (27%)
🏙️ May 2025: 96 markets (32%)
While the national median home value is still up 0.5% YoY, this growth has slowed considerably compared to the 3.9% YoY increase recorded in May 2024.

 
🚨 Cities With the Largest Declines (YoY % Drop):
📍 Austin, TX: -5.5%
📍 Tampa, FL: -5.4%
📍 Phoenix, AZ / Dallas, TX: -3.4%
📍 Orlando, FL / Miami, FL: -3.2%
📍 San Francisco, CA: -2.5%
📍 Denver, CO: -2.4%
📍 New Orleans, LA: -2.3%
📍 San Diego, CA: -1.9%
📍 Houston, TX: -1.5%
📍 Seattle, WA: -0.1%
... and more

 
🔍 What's Causing the Shift?
📦 More inventory: Active listings in some regions now exceed pre-pandemic 2019 levels—especially in the Sun Belt and Mountain West.

📉 Softening demand: Higher mortgage rates and affordability pressures have cooled buyer activity in overheated markets like Austin, Tampa, and Phoenix.

🏗️ Builder incentives: New home builders are offering discounts and perks, diverting buyers away from resale homes and creating downward pressure on prices.

🏘️ Condo drag: The Zillow index includes condos, which are underperforming. If we isolate just single-family homes, prices are still up +1.0% YoY.

 
🧭 What to Expect Moving Forward
Experts at ResiClub expect more metros to register price declines in the coming months. Since the Zillow Home Value Index often leads lagging indicators like Case-Shiller and Freddie Mac, broader recognition of the shift could soon follow.

Meanwhile, existing home sales remain historically low:

📉 May 2025: 389,000
⬇️ Down from 405,000 (May 2024)
📊 For context: May 2017 saw 555,000 sales

(Source: National Association of Realtors, June 2025)

 
🤝 How KW Default Solutions Helps Navigate the Shift
Whether you’re an agent, investor, or property owner, navigating a decelerating market takes strategy, speed, and support. At KW Default Solutions, we’re giving real estate professionals the tools, scripts, and market intelligence to guide clients through this changing environment.

➡️ Want to stay ahead of the curve in your market? Let’s connect.

 
Sources:

📈 Zillow Home Value Index (May 2025)
📘 ResiClub PRO Market Report (June 2025) - Excellant info!
🏠 National Association of Realtors, Existing Home Sales (June 2025)

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