42 U.S. housing markets report declining home prices

National home prices increased by 2.1% from February 2024 to February 2025, according to the Zillow Home Value Index. This is slower growth compared to the 4.6% increase seen last spring. However, some housing markets are showing a decline in home prices. Currently, 42 out of the 300 largest metro areas in the U.S. are experiencing falling home prices. This is a rise from 31 areas last month. While prices are still going up in regions with limited housing supply, such as parts of the Northeast and Southern California, other areas like Texas and Florida are facing price reductions. Cities with notable price drops include Austin (-3.8%), Tampa (-3.6%), and San Antonio (-2%). Many of these declining markets are in the Sun Belt region, where home prices rose sharply during the pandemic. However, as migration slowed and mortgage rates increased, these areas are struggling to maintain high prices. New construction is also affecting home prices. Builders in these regions are often lowering prices or providing incentives to attract buyers, which can cool off the resale market. As a result, some buyers are choosing new homes over existing ones due to better deals. Looking ahead, the trend of softening prices could continue. Active inventory levels will be key to watch. If places like Tampa keep seeing significant increases in available homes, it might lead to more opportunities for homebuyers in the near future.