2025 Housing Market: Top 10 Declining Home Prices You Should Know
The U.S. housing market has undergone significant changes in recent years, with many areas witnessing drops in home prices. According to recent insights from Cotality (formerly CoreLogic), substantial cooling trends are taking place in various markets. This article delves into the top 10 housing markets of 2025 where home prices are experiencing declines, providing a glimmer of hope for homebuyers feeling pressured in hotter markets.
An Overview of the Current Housing Market
The national housing scene isn’t collapsing, but the frenzied pace witnessed over the past few years is winding down. Cotality’s report for June 2025 indicates a year-over-year price growth of just 2.0%—the slowest rate since the spring of 2012. Prior to this dip, prices were escalating closer to 3%, signaling a significant slowdown.
Key Factors Behind the Slowdown:
-
Economic Concerns: Dr. Selma Hepp, Chief Economist at Cotality, highlights worries surrounding personal finances and job prospects. Such uncertainties make large purchases like homes feel riskier.
- Increased Housing Inventory: More homes on the market lead to less competition, which can ease price pressures. "Improved for-sale supply is providing buyers with more options," states Dr. Hepp.
Despite this cooling, Cotality forecasts that the national price growth may see a 4.3% increase from April 2025 to April 2026, establishing a nuanced picture of a market that remains variable.
Where Are Home Prices Declining?
While the overall trend may show slight growth, many specific areas are experiencing falling prices. Notably, only 14 out of the 100 largest markets are seeing annual declines, a modest increase from the previous month. This highlights potential opportunities for buyers looking for bargains.
Top 10 Housing Markets with Falling Prices in 2025:
- Cape Coral, Florida: -6.5%
- Punta Gorda, Florida: -6.2%
- Logan, Utah: -5.4%
- McAllen, Texas: -5.1%
- Victoria, Texas: -4.5%
- North Port, Florida: -4.3%
- Naples, Florida: -3.7%
- Waco, Texas: -3.1%
- Lake Charles, Louisiana: -2.7%
- Eagle Pass, Texas: -2.7%
This list exemplifies that while some areas are cooling off, others continue to see substantial challenges.
Florida: A Key Player in the Cooldown
Florida leads with four regions in the top ten. After experiencing phenomenal growth fueled by low interest rates and migration, the state is adjusting. Here’s a closer look:
- Cape Coral is experiencing an annual drop of 6.5%. Cotality notes that Florida is "continuing to course correct after years of explosive growth."
- Florida Overall: Reports show a negative appreciation of -0.8% in April 2025, further indicating a statewide cooling effect.
Why This Shift?
Rapid price increases can produce vulnerabilities in the market. With rising interest rates and affordability becoming a hurdle, it’s clear that Florida is recalibrating as demand softens.
Texas: Also Cooling Down
Texas also features prominently on the list, with cities like McAllen and Waco experiencing declines of 5.1% and 3.1%, respectively. Some contributing factors include:
- Market Correction: Rapid construction in response to population growth may have led to oversupply.
- Job Market Fluctuations: Changes in energy sector dynamics could be influencing local economies and housing demands.
Other Declining Markets
- Logan, Utah has dropped 5.4%, following a steep price rise during the pandemic.
- Lake Charles, Louisiana, with a 2.7% decline, indicates that local conditions are essential in understanding market dynamics.
Contrasting Growth Areas
While some markets cool off, several regions are still experiencing notable growth. Cotality’s findings showcase the “Top 10 Hottest Housing Markets,” showcasing double-digit upticks. Locations include:
- Kokomo, IN: +13.4%
- Decatur, IL: +12.5%
- Syracuse, NY: +11.1%
This divergence highlights the complex nature of the real estate landscape.
Implications for Buyers and Sellers
For Buyers:
- Opportunity to Negotiate: Reduced competition means buyers may find greater negotiating power than in previous years.
- Risks to Consider: Buyers should remain cautious and evaluate local market conditions as prices may continue to fluctuate.
For Sellers:
- Adjustment Required: Sellers in cooling markets must recalibrate expectations, as typical bidding wars may become less common. Pricing competitively will be essential to attract buyers.
Conclusion: A Complex Market Landscape
The 2025 housing market offers a mixed bag of opportunities and challenges. Areas such as Florida and Texas exhibit signs of correction after years of exuberance, while other regions still thrive. Understanding local dynamics is crucial for making informed decisions.
For anyone looking to navigate this evolving landscape, whether buying or selling, monitoring specific market trends can provide a significant advantage.
Explore more about current housing trends and investment opportunities at Cotality.