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Nationwide residence costs have risen by 2.1% year-over-year from February 2024 to February 2025, in line with the Zillow House Worth Index. That’s a deceleration from the 4.6% year-over-year charge final spring. Nevertheless, not each housing market is seeing rising residence costs.
Among the many 300 largest metro space housing markets, 42 markets are seeing falling residence costs on a year-over-year foundation. That’s up from last month when just 31 of the nation’s 300 largest metro space housing markets had falling year-over-year residence costs.
Whereas residence costs proceed to rise in areas with tight stock—reminiscent of a lot of the Northeast, Midwest, and Southern California—some housing markets in states like Texas, Florida, and Louisiana, the place stock has now surpassed pre-pandemic 2019 ranges, are experiencing modest worth corrections.
These year-over-year declines are evident in main metros reminiscent of Austin (-3.8%); Tampa (-3.6%); San Antonio (-2%); New Orleans (-1.7%); Phoenix (-1.6%); Jacksonville, Florida (-1.5%); Dallas (-1.4%); and Orlando (-1.4%).
The markets seeing essentially the most softness, the place homebuyers are gaining leverage, are primarily positioned in Solar Belt areas, significantly the Gulf Coast and Mountain West. These areas noticed main worth surges throughout the pandemic housing growth, with residence worth progress outpacing native revenue ranges. As pandemic-driven migration slowed and mortgage charges rose, markets like Tampa and Austin confronted challenges, counting on native revenue ranges to assist frothy residence costs.
This softening development is additional compounded by an abundance of latest residence provide within the Solar Belt. Builders are sometimes prepared to decrease costs or supply affordability incentives to take care of gross sales, which additionally has a cooling impact on the resale market. Some consumers, who would have beforehand thought of current properties, at the moment are choosing new properties with extra favorable offers.
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Will this softening proceed this yr? A key indicator to observe might be energetic stock ranges. If weaker markets like Tampa proceed to see substantial will increase in energetic stock—already above pre-pandemic ranges—it might sign ongoing softening, probably creating extra alternatives for homebuyers.
