In a new report that’s sending shockwaves through the real estate world, Zillow confirms steep home price drops in major U.S. cities.
Some metro areas seeing double-digit declines over the past six months.
After years of historic price surges, the market appears to be entering a major correction.
Key Takeaways From the Zillow Report
- 10 U.S. cities saw home values drop by more than 9% between September 2024 and March 2025.
- Former “hot markets” like Austin, Phoenix, and Tampa are leading the downturn.
- Rising mortgage rates, affordability issues, and increased inventory are driving the decline.
- Zillow analysts warn that more cities may soon follow.
Top 10 Cities Where Home Prices Are Falling Fast
Here’s where the biggest real estate declines are hitting, according to Zillow:
- Austin, TX – ▼16.2%
- Phoenix, AZ – ▼14.8%
- Tampa, FL – ▼13.5%
- Boise, ID – ▼12.9%
- Las Vegas, NV – ▼11.7%
- Salt Lake City, UT – ▼11.4%
- Denver, CO – ▼10.6%
- Raleigh, NC – ▼10.2%
- Charlotte, NC – ▼9.8%
- Orlando, FL – ▼9.3%
These cities were once real estate darlings during the pandemic boom. But the momentum has clearly reversed.
Why the Drop? Experts Blame Rates & Buyer Pullback
According to Zillow’s senior economists, the crash is no mystery:
After years of inflated growth, buyers are now hitting a wall. With mortgage rates nearly 7% and inflation still high, affordability has reached a breaking point.”
Increased listings and a wait-and-see attitude from buyers have shifted the power dynamic in favor of those willing to hold off—causing prices to fall even further.
What Should Homeowners and Buyers Do Now?
If you own in one of these cities:
- Don’t panic sell—housing cycles tend to stabilize within 1–2 years.
- Consider renting your home if relocating—it may help avoid losses.
- Monitor local trends, not just national ones. Some neighborhoods may hold value better.
If you're buying:
Now could be a chance to negotiate better deals, but proceed carefully. Prices may continue dropping in some areas throughout 2025.
Could This Become a Nationwide Housing Collapse?
Experts are watching closely. Zillow’s report indicates that cities in California, parts of the Midwest, and suburban New York could be **next in line for declines** if mortgage rates remain high.
Whether this becomes a full-blown housing crash or just a regional correction will likely depend on upcoming interest rate decisions and buyer confidence this summer.
Is Your City on the List?
Have you noticed a sudden drop in home values in your neighborhood? Are you planning to buy, sell, or wait it out?
Drop your experience in the comments.
And remember to share this article with friends or family who may be affected.
Let’s get the conversation going.