Home Prices Decline in Many Cities While Listings Surge

• Author: Margaret Hills
• Posted: 2025-08-14

Many people are wondering if home prices are finally coming down. According to recent data, the answer depends on where you are looking to buy a home. Here is what’s happening with the housing market right now.

Are Home Prices Going Down?

In several places, yes. The Federal Housing Finance Agency reported that U.S. home prices fell by 0.2% between April and May—their most recent data.

Realtor.com found that in July 2025, 33 out of the 50 largest U.S. cities saw lower home prices compared to the previous year. In eight other cities, prices were still rising—but more slowly.

Also, the U.S. Census Bureau says the median home price in the second quarter of 2025 was $410,800. That’s down from $423,100 at the start of the year.

Another good sign for buyers is that more homes are being listed for sale. Realtor.com shows a 25% increase in homes for sale from July 2024 to July 2025.

More than 20% of listings also had price cuts last month. When there are more homes to choose from, buyers have more power, and sellers may have to lower their prices.

However, the number of homes for sale is still not back to what it was before the pandemic. Many homeowners don’t want to give up the low interest rates (around 3%) they got a few years ago. This is because current 30-year mortgage rates are around 6% or higher in 2025.

Mortgage rates might go lower soon. The Federal Reserve is expected to reduce rates at least once this year, and Fannie Mae forecasts the average mortgage rate will be about 6.4% by the end of 2026.

If rates drop, more people might decide to sell their homes, adding more listings to the market.
 

Will Prices Keep Going Down?

Most experts think home prices will keep growing, but more slowly. Fannie Mae predicts that annual home price growth will drop from 3.8% this quarter to just 1.1% by the end of 2026.

The Mortgage Bankers Association expects price growth to fall from 2.8% to just 0.3% next year. This could help make homes more affordable across the country.
 

Where Are Prices Dropping Most?

Some cities are seeing bigger price drops than others. In Austin, Texas, for example, prices dropped almost 5% in the last year, and homes are staying on the market for about 65 days.

Nearly one-third of homes for sale there had their prices lowered. Other cities where prices have dropped since July 2022 (when the market peaked) include:
 

• Miami: nearly 18% lower
• Austin: down 14.8%
• San Antonio: down 10.6%

There were also significant price drops in San Francisco, Dallas, Orlando, Denver, and Raleigh. However, prices aren’t falling everywhere. In fact, in 31 of the 50 largest metro areas, prices have stayed the same or even gone up.

For example, Detroit’s prices haven’t changed much, while Milwaukee, Providence, and Cleveland have seen increases of more than 20%.
 

Tips for Buyers

If you want to buy a home, here are some strategies:
 

• Consider Refinancing Later: You could buy a home now and refinance your mortgage later if rates go down, letting you save money over time.
• Start Small: Even if you can’t get your dream house, you could start with a condo or a smaller home to begin building equity.
• Look at Modular Homes: These are homes built in sections off-site and then assembled on your lot. They often cost 10% to 20% less than traditional homes.

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