106 housing markets see falling prices, none in Midwest

3 months ago7 min read

The U. S.housing market is showing a clear split in fortunes, with 106 of the nation's 300 largest metro areas now seeing year-over-year price declines, according to a Zillow Home Value Index analysis. That figure, representing over a third of major markets, has stabilized after climbing sharply in the first half of 2025, when the number of declining markets jumped from just 31 in January to a peak of 110 by June.The national picture is essentially flat, with prices up a mere 0. 1% from December 2024 to December 2025, a significant deceleration from the 2.6% growth seen a year prior. The regional story, however, is one of stark contrast.The softness is heavily concentrated in Sunbelt states like Texas, Florida, and Colorado—areas that overheated during the pandemic boom, saw a surge in new construction, and now have inventory levels comfortably above their 2019 baselines. This gives buyers leverage, leading builders to offer incentives and putting downward pressure on resale prices.Meanwhile, the Midwest and parts of the Northeast, where active listings remain stubbornly below pre-pandemic levels, are still posting modest gains. For everyday buyers and sellers, this isn't a uniform crash but a necessary recalibration.Markets that ran too hot, too fast are now cooling as they realign with local income levels, a classic lesson in sustainable growth versus speculative frenzy. The stabilization in the count of declining markets over the past seven months suggests the initial shock of higher mortgage rates and shifting demand is being absorbed, setting the stage for a more balanced, if fragmented, market ahead.

#featured

#housing market

#home prices

#regional trends

#inventory

#Sunbelt

#Midwest

#Zillow Home Value Index

#real estate analysis

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