July 15, 2025 – A growing number of U.S. housing markets are experiencing falling home prices, signaling a cooling of the post-pandemic real estate surge. According to a CNBC report citing ICE Mortgage Technology, nearly one-third of the nation’s 100 largest metro areas saw annual price declines of at least 1% in June 2025, with national home price growth slowing to 1.3% year-over-year, down from 1.6% in May—the slowest rate in two years. This shift, driven by high mortgage rates, rising inventory, and softening demand, is creating opportunities for buyers but challenges for sellers in certain regions. Here’s a detailed look at the trends, key markets, and implications.

1. Key Drivers of Price Declines
   • High Mortgage Rates: The average 30-year fixed mortgage rate was 6.67% in early July 2025, down slightly from 6.95% a year earlier but still high, reducing buyer affordability. A family earning the median U.S. income of $80,000 can afford a $356,000 home at 7% rates, compared to $543,000 at 3% rates.
   • Rising Inventory: Inventory surged 29% year-over-year in June 2025, with 2.1 million homes for sale in May, up 16.2% from last year. This oversupply, particularly in Sun Belt markets, is pressuring sellers to cut prices.
   • Falling Demand: Home sales dropped, with existing-home sales at a seasonally adjusted annual rate of 4.03 million in May, down 0.7% year-over-year. High prices and economic uncertainty, including tariff concerns, have sidelined buyers.
   • Regional Shifts: The South and West, especially Florida and Texas, are seeing the most significant corrections due to overbuilding and reduced migration post-pandemic. Meanwhile, Northeast and Midwest markets, with tighter inventory, continue to see price gains.
2. Markets with the Largest Price Drops
   According to various reports, the following cities are among those experiencing the steepest declines:
   • Cape Coral, Florida: Prices fell over 9% year-over-year, driven by increased inventory and reduced demand after pandemic-era migration slowed.
   • Austin, Texas: A 3-4.5% drop in home prices, with inventory up significantly, reflects a correction from its pandemic boomtown status.
   • Jacksonville, Florida: A 3.4% year-over-year decline, with 28% of listings showing price cuts and inventory up 35% to 9,676 homes.
   • Tampa, Florida: Consistent declines, with a 1.46% drop reported from February 2024 to February 2025, fueled by oversupply and natural disaster concerns.
   • Oakland, California: One of the largest drops, alongside Jacksonville, with prices down significantly due to high inventory and buyer pullback.
   • Palm Bay and Deltona, Florida: Both saw 27% of listings with price reductions, with median prices around $389,825–$394,450 and inventory up 28–31%.
   • Denver, Colorado: A 7% drop from its 2022 peak, with inventory surging 65% to 10,345 listings and 27% of homes marked down.
   • Other notable markets include McAllen, Victoria, Waco, and Eagle Pass in Texas, and Charleston, South Carolina, with price cuts on 26–28% of listings.
3. Regional Trends
   • Sun Belt Correction: Florida and Texas dominate the list of declining markets due to overbuilding during the pandemic and reduced buyer interest from economic uncertainty and return-to-office mandates. For example, Florida’s median home values dropped 0.55% year-over-year, with Arizona close behind at 6.9% from its June 2022 peak.
   • Northeast and Midwest Strength: Markets like Syracuse, NY (+11.1%), Kokomo, IN (+13.4%), and Decatur, IL (+12.5%) are seeing double-digit price growth due to limited inventory and sustained demand in more affordable regions.
   • Condo vs. Single-Family Homes: Nationally, single-family home prices rose 1.6%, while condominium prices fell 1.4%, dragging down overall indices in some markets.
4. Implications for Buyers and Sellers
   • Buyers: Increased inventory and price cuts, especially in Sun Belt markets, offer more negotiating power. In Jacksonville, buyers are securing homes 5% below list price with $10,000 in seller concessions. Redfin reports 20.7% of June listings had price reductions, the highest for any June since 2016. Buyers should research local conditions, as some homes still sell quickly in desirable neighborhoods.
   • Sellers: Overpricing based on pandemic-era comps is leading to stale listings, with 44% of April homes on the market for 60+ days. Sellers in softening markets should price realistically and work with agents to navigate buyer’s markets.
   • Market Outlook: Redfin predicts a 1% national price drop by year-end 2025, while others, like Fannie Mae, expect 1.3–3.5% growth, tempered by high rates and tariff uncertainties. A crash akin to 2008 is unlikely due to stronger homeowner balance sheets and stricter lending standards.
5. Economic and Policy Context
   • Trump Administration Policies: Proposals to reduce immigration and limit multifamily zoning may constrain construction labor and housing supply, potentially offsetting price declines in some areas. Conversely, opening federal land for development could ease shortages.
   • Inventory Dynamics: Despite a 20.3% year-over-year increase in resale inventory to a 4.6-month supply in May, total inventory remains below pre-pandemic levels, limiting widespread price drops.
   • Sentiment on X: Posts reflect a cooling market, with @ZuckerbergRpt and @MarketSanity noting one-third of major markets seeing declines, and @charliebilello predicting further weakness due to rising supply and falling demand.
6. What to Watch
   • Inventory Levels: Continued increases, especially in Sun Belt markets like Tampa, could deepen price corrections if demand doesn’t rebound.
   • Mortgage Rates: A drop to the low-to-mid 6% range by late 2025, as projected by the Mortgage Bankers Association, could boost demand and stabilize prices.
   • Economic Factors: Tariff impacts and inflation trends will influence buyer confidence and construction costs, potentially exacerbating or mitigating declines.