Housing Prices Begin Falling in Select U.S. Cities—Is a Bigger Decline Coming?
It feels like nearly everything costs more these days, especially housing. The questions piling up with recent developments are only natural. Are prices finally easing? Are we headed into a more balanced market, or is this just a blip?
Well, something’s shifting for sure. In some U.S. cities, housing prices are slipping. It’s barely on the national radar, but different little mentions about it are adding up. If you’re waiting for a break or a chance to jump back into trying to own your own home, this might matter a lot.
Here’s what we’ll explore: Where are prices dropping? What’s pushing them down? And that big question on your mind—are we looking at a momentary cooldown, or are we stepping into a broader, longer-term decline?
The Market Starts To Shift
Image via iStockphoto/Andrii Yalanskyi
For years, the story of American housing had been the same. There were too few homes, too many buyers, and prices just kept climbing higher. Now, for the first time in a while, the narrative is shifting. Signs of softening are showing up, and in some places, prices are sliding.
National numbers already hint at a change. Federal data showed a small dip in home prices earlier this year, and Realtor.com reports that in July 2025, listings in 33 of the 50 largest metros were cheaper than just a year before.
The median home price also slipped from $423,100 at the start of the year to $410,800 in the second quarter. It’s not a collapse, but it is a reversal from the rapid gains people got used to during and after the pandemic.
Where Prices Are Falling Fastest
The biggest declines are concentrated in the South and West, regions that saw explosive building during the pandemic. Miami has been the standout, with prices down almost 19 percent since the national market peak in 2022.
Austin follows with a nearly 15 percent drop, and San Antonio is down over 10 percent. Dallas and Denver have also cooled, while several California markets, including San Francisco, are seeing declines of their own.
Cape Coral, Florida, has seen the steepest drop of any U.S. metro area in the past two years. By contrast, parts of the Northeast and Midwest are still setting records. Limited inventory is keeping prices high. Milwaukee’s median price has surged more than 25 percent since 2022.
These splits reveal just how local housing markets are and why national averages don’t always tell the whole story.
What’s Driving The Change
Image via iStockphoto/AndreyPopov
The cooling is tied to a few straightforward forces like higher mortgage rates, more homes on the market, and a reality check after years of overvaluation. Thirty-year mortgage rates have hovered in the upper 6 percent range throughout 2025, which is keeping many buyers cautious.
Meanwhile, total active listings rose nearly 25 percent between July 2024 and July 2025. More choices for buyers mean sellers often have to cut prices to compete.
Forecasts suggest the trend isn’t over. Fannie Mae, a government-sponsored enterprise that plays a crucial role in the U.S. housing market, expects national price growth to slow to just over 1 percent by the end of 2026. The Mortgage Bankers Association predicts almost flat growth at 0.3 percent next year.
Zillow even projects small-city crashes in places like Greenville, Mississippi, and Pecos, Texas, where values could drop more than 10 percent in the next 12 months. Larger cities may not fall as steeply, but predictions point to declines in New Orleans, San Francisco, Austin, and Washington, D.C.
What This Means For Buyers And Sellers
Image via iStockphoto/KatarzynaBialasiewicz
For buyers, the shift could finally offer some breathing room. Homes are spending a longer time on the market, so many sellers are lowering their asking prices. While affordability is still tough with current mortgage rates, opportunities are emerging in cities where supply has grown quickly. Buyers who get in now may also have the chance to refinance later if interest rates ease.
For sellers, the adjustment requires strategy. Holding out for last year’s peak prices is risky in markets where listings are rising and cuts are common. Pricing competitively and being realistic about demand is more important than ever.
Looking Ahead
The housing market isn’t headed for a nationwide crash, but it is shifting into a new phase. Some cities are already deep into price corrections, while others remain expensive and constrained. The next year will reveal just how far the trend spreads, and whether the declines in Miami, Austin, and Cape Coral are a preview of what’s to come across more of the country.