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Number of major housing markets with falling home prices stands at 105—up from 31 in January

Among the 300 largest metro area housing markets, these 105 markets are seeing falling home prices on a year-over-year basis.

Author

Lance Lambert
August 22, 2025

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Where home prices are rising—and where they’re falling

National home prices rose +0.2% year-over-year between July 2024 and July 2025, according to the Zillow Home Value Index reading published this week—a decelerated rate from the +2.8% year-over-year rate between July 2023 and July 2024.

This year, the number of major metro area housing markets seeing year-over-year declines has climbed.

—> 31 of the nation’s 300 largest housing markets (i.e., 10% of markets) had a falling year-over-year reading in the January 2024 to January 2025 window.

—> 42 of the nation’s 300 largest housing markets (i.e., 14% of markets) had a falling year-over-year reading in the February 2024 to February 2025 window.

—> 60 of the nation’s 300 largest housing markets (i.e., 20% of markets) had a falling year-over-year reading in the March 2024 to March 2025 window.

—> 80 of the nation’s 300 largest housing markets (i.e., 27% of markets) had a falling year-over-year reading in the April 2024 to April 2025 window.

—> 96 of the nation’s 300 largest housing markets (i.e., 32% of markets) had a falling year-over-year reading in the May 2024 to May 2025 window.

—> 110 of the nation’s 300 largest housing markets (i.e., 36% of markets) had a falling year-over-year reading in the June 2024 to June 2025 window.

—> 105 of the nation’s 300 largest housing markets (i.e., 35% of markets) had a falling year-over-year reading in the July 2024 to July 2025 window.

Through 2025, more housing markets have slipped into year-over-year price declines as the supply-demand balance gradually tilts toward buyers in today’s affordability-constrained, post-boom environment. But this month, that list of declining markets actually got a little shorter.

Home prices are still climbing in many regions where active inventory remains well below pre-pandemic 2019 levels, such as pockets of the Northeast and Midwest. In contrast, some pockets in states like Arizona, Texas, Florida, Colorado, and Louisiana—where active inventory exceeds pre-pandemic 2019 levels—are seeing modest home price pullbacks.

Year-over-year home value declines, using the Zillow Home Value Index, are evident in major metros such as Tampa (-6.2%); Austin (-6.0%); Miami (-4.6%); Orlando (-4.3%); Dallas (-3.9%); San Francisco (-3.8%); Phoenix (-3.5%); Jacksonville, Fla. (-3.4%); San Antonio (-3.1%); Atlanta (-3.1%); Denver (-2.9%); San Diego (-2.7%); Raleigh (-2.3%); Sacramento (-2.2%); Riverside (-2.1%); Houston (-1.9%); San Jose (-1.6%); New Orleans (-1.0%); Charlotte (-0.9%); Los Angeles (-0.8%); Portland, Ore. (-0.8%); Seattle (-0.8%); Memphis (-0.8%); Nashville (-0.2%); and Las Vegas (-0.0%).

Click here for an interactive version of the chart below

Many of the housing markets seeing the most softness, where homebuyers have gained the most leverage, are primarily located in Sun Belt regions, particularly the Gulf Coast and Mountain West. Many of these areas saw major price surges during the Pandemic Housing Boom, with home price growth outpacing local income levels. As pandemic-driven domestic migration slowed and mortgage rates rose, markets like Tampa and Austin faced challenges, relying on local income levels to support frothy home prices. This softening trend is further compounded by an abundance of new home supply in the Sun Belt. Builders are often willing to lower prices or offer affordability incentives to maintain sales, which also has a cooling effect on the resale market. Some buyers, who would have previously considered existing homes, are now opting for new homes with more favorable homebuilder deals.

Click here to view an interactive version of the map below

Given the shift in active housing inventory and months of supply, this softening and regional variation should not surprise ResiClub PRO members—we’ve been closely documenting it. [ResiClub PRO members can view our latest analysis of home prices across +800 metros and +3,000 counties here.]

Of course, while 105 of the nation’s 300 largest metro area housing markets are seeing home price declines, another 195 are still seeing year-over-year home price increases.

Where are home prices still up on a year-over-year basis? See the map below.

Click here to view an interactive of the map below

Housing permits data drops

This week, we got the latest permits and housing starts data.

It shows that single-family permits continue to soften, while multifamily permits are holding steady—perhaps passing through a trough—following a sharp pullback in 2023-2024.

Housing permits (and starts) lead completions. So while multifamily permits fell sharply in 2023-2024, multifamily completions reached their highest levels last year since 1974, as projects financed during the ultralow pandemic rates came online. Now, multifamily completions are rolling over.

As always: Keep in mind that this data has a large margin of error, so avoid drawing too strong conclusions from a single reading.

Fed Chair Jerome Powell signals possible rate cut

Speaking at Jackson Hole on Friday, Fed chair Jerome Powell suggested that economic conditions “may warrant” further cuts to short-term interest rate cuts—and that the Fed would proceed “carefully.”

"While the labor market appears to be in balance, it's a curious kind of balance that results from a marked slowing in both the supply of and demand for workers… This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly, in the form of sharply higher layoffs and rising unemployment."

"It is also possible, however, that the upward pressure on [consumer] prices from tariffs could spur a more lasting inflation dynamic, and that is a risk to be assessed and managed."

“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

“FOMC members will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks. We will never deviate from that approach.”

- Fed Chair Jerome Powell said on August 22, 2025

While there’s a historical relationship between short-term and long-term rates, the Federal Reserve’s short-term rate doesn’t directly set long-term rates like mortgage rates. Instead, long-term yields—like the 10-year Treasury yield and the average 30-year fixed mortgage rate—are set by demand / lack of demand for the underlying bond. Yields move inversely to bond prices. If demand for long-term bonds rises, prices go up and yields/mortgage rates fall. If bond demand falls, bond prices drop and yields/mortgage rates rise.

IF the Fed cuts rates further but the economy holds firm or the labor market tightens, mortgage rates in the housing sector could remain higher than the industry hopes.

IF the Fed cuts rates further and the labor market continues to soften—or weakens more rapidly—that scenario is likely to result in a greater drop in long-term rates/mortgage rates.

ResiClub PRO members who want to better understand the mechanics behind mortgage rates—and the scenarios that could lower them—should read this report: