Where Are Housing Prices Dropping? Key US Markets

Understanding Current Housing Market Dynamics

The U.S. housing market shifts, influenced by factors affecting home availability and cost. Key metrics provide insight into its health and direction, showing whether prices are increasing, slowing growth, or declining.

One primary measure of housing prices is the median home price, the midpoint of all home sale prices. This metric is more reliable than the average home price, being less skewed by extreme sales. Price per square foot also compares home values across different property sizes.

Housing inventory levels (available homes) directly impact prices; high inventory leads to downward pressure, while low inventory drives prices up. Days on market (DOM) measures time listed before selling, with longer durations signaling less buyer demand and price reductions. Sales volume reflects activity. The national housing market currently exhibits mixed signals, with some areas seeing slower appreciation or declines, while others continue to see price growth.

Geographic Areas with Price Adjustments

Specific geographic areas across the United States have experienced notable price adjustments. These shifts are concentrated in regions that previously saw rapid price increases, particularly in the South and West. In these areas, declines in median listing prices indicate a more balanced market, moving away from the intense competition of prior years.

Austin, Texas, recorded decreases in median listing prices (nearly 15% over three years, 4.9% year-over-year in July 2025). Austin homes took longer to sell, and over 31% of listings saw price cuts. Miami, Florida, experienced a price reduction; median listing prices fell 19%. Miami properties remained on the market longer than the national median, reflecting reduced buyer demand from elevated prices, high mortgage rates, and increased insurance costs.

Other areas in the Sunbelt and Mountain West, such as Tampa, Phoenix, and Dallas, have seen year-over-year home value declines. Tampa, Phoenix, and Dallas experienced declines. These markets, which saw price surges during the pandemic, are now facing challenges as domestic migration slows and higher mortgage rates impact affordability. Some cities in the Northeast and Midwest, like Boston and Philadelphia, have observed decreases in median listing prices, though their overall price levels remain higher than pre-pandemic figures due to ongoing inventory shortages.

Influences on Housing Price Trends

Economic and market factors contribute to price adjustments across the country. Interest rate changes, particularly mortgage rates, play a role in housing affordability and demand. When interest rates rise, borrowing costs increase, making mortgage payments more expensive and reducing the number of homebuyers. This reduced affordability can lead to a cooling of demand, slowing home price appreciation or causing declines.

Inflation affects the housing market. As the general price level of goods and services rises, construction costs, including materials and labor, increase. This can lead to higher prices for newly built homes or delays in construction projects. While real estate can act as a hedge against inflation, central banks often respond to high inflation by raising interest rates, further impacting homebuyers’ borrowing costs.

The dynamics of housing supply and demand are significant drivers of price trends. An oversupply of homes, where available inventory exceeds buyer demand, leads to increased competition among sellers and downward pressure on prices. Conversely, a limited supply of homes relative to demand can drive prices upward. Economic conditions, such as employment rates, consumer confidence, and the potential for a recession, influence buyer behavior and market stability. Strong employment and consumer confidence support demand, while economic uncertainty can lead to caution and reduced purchasing activity.

Demographic shifts and migration patterns contribute to housing price trends. Changes in population age structures, household formation, and where people choose to live can alter housing demand in specific regions. For example, shifts towards remote work have influenced migration to certain areas, impacting local housing markets. The aging population, with many homeowners choosing to remain in their homes longer, can affect housing supply by reducing the availability of existing homes for sale.