One-third of the largest housing markets in the United States are now experiencing falling home prices, a stark signal that the pandemic-era real estate boom has definitively ended in significant portions of the country. According to Zillow Home Value Index data analyzed by ResiClub, 100 of the 300 largest U.S. housing markets recorded year-over-year home price declines in the January 2025 to January 2026 window. National home price growth has decelerated to a near-flatline of just 0.2 percent year-over-year, down sharply from 2.6 percent growth a year earlier.
In Austin, Texas, one of the hardest-hit metros, home prices now sit 27.8 percent below their 2022 peak. But the story is not uniform. While Sun Belt markets in Florida, Texas, and Colorado are seeing meaningful price drops, pockets of the Northeast and Midwest are still posting gains above 6 percent annually. This split market creates a confusing landscape for buyers, sellers, and policymakers alike. This article breaks down where prices are falling the hardest, which regions are still climbing, what is driving the divergence, and what forecasters expect through the rest of 2026.
Table of Contents
- How Many of the 300 Largest Housing Markets Are Seeing Declining Home Prices?
- Which Housing Markets Have the Steepest Price Declines Right Now?
- Where Are Home Prices Still Rising and Why?
- What Rising Inventory Means for Buyers and Sellers in 2026
- Florida Markets Face the Highest Risk of Further Declines
- National Price Growth Has Essentially Flatlined
- What Forecasters Expect for the Rest of 2026
- Conclusion
- Frequently Asked Questions
How Many of the 300 Largest Housing Markets Are Seeing Declining Home Prices?
As of January 2026 data, exactly 100 of the 300 largest U.S. housing markets had negative year-over-year price changes, according to ResiClub’s analysis of the Zillow Home Value Index. That 33 percent figure has been remarkably stable in recent months after peaking at 110 markets, or 36 percent, in June 2025. The October 2025 reading showed 105 declining markets, November dipped to 98, December bounced back to 106, and January settled at 100. The stabilization suggests the wave of price corrections may be plateauing rather than accelerating, though one-third of major markets still trending downward is historically significant.
To put this in perspective, the national picture barely registers as positive. The Zillow Home Value Index fell 0.4 percent month-over-month in January 2026, and on an annual basis, national prices crept up only 0.2 percent. Cotality, formerly CoreLogic, pegged national year-over-year price growth at 0.9 percent as of December 2025, one of the softest readings since the post-Great Recession recovery. When national averages are this close to zero, they mask a market that is functionally split in two: areas with genuine price declines and areas still experiencing meaningful appreciation. The average tells you very little about what is happening in any individual city.
Which Housing Markets Have the Steepest Price Declines Right Now?
The worst-performing markets are concentrated in Florida and Texas, two states that saw explosive pandemic-era migration and construction booms that have now reversed course. North Port-Bradenton-Sarasota, Florida holds the grim distinction of the worst year-over-year decrease nationwide at negative 8.6 percent. Cape Coral-Fort Myers, Florida is not far behind with prices down 7.9 percent year-over-year. The typical single-family home in Cape Coral-Fort Myers sold for nearly 7 percent less in August 2025 compared to a year prior, and prices there sit more than 13 percent below their August 2022 pandemic peak. These are not minor fluctuations. For a homeowner who bought at the top in 2022, the losses are substantial and real. Texas tells a similar story.
Austin’s metro area has experienced one of the most dramatic corrections in the country, with home prices now 27.8 percent below their 2022 peak and down 6.1 percent since 2024, with a more recent year-over-year decline of 2.5 percent. San Antonio has seen prices drop nearly 1.8 percent year-over-year. However, it is important to note that these declines hit differently depending on when someone bought. A homeowner who purchased in Austin in 2019 is likely still well above their purchase price despite the correction. Someone who bought at the 2022 peak with a small down payment may now be underwater on their mortgage. The timing of purchase matters enormously in determining whether a price correction is a financial inconvenience or a genuine crisis. At the state level, Cotality data through December 2025 shows Florida leading the downturn at negative 2.36 percent, followed by Colorado at negative 1.31 percent, Hawaii at negative 1.11 percent, Utah at negative 1.11 percent, and Texas at negative 1.09 percent.
Where Are Home Prices Still Rising and Why?
While the Sun Belt corrects, parts of the Northeast and Midwest are experiencing the opposite dynamic. Hartford, Connecticut has seen home prices climb 21.2 percent above their 2022 peak, with a 6.27 percent year-over-year gain. newark, New Jersey posted the highest year-over-year gain among the top 100 metros at 6.73 percent per Cotality data. The Midwest as a whole is the strongest region, averaging 3.56 percent annual appreciation, led by Illinois at 4.91 percent, Wisconsin at 4.78 percent, and Nebraska at 4.75 percent. The reason for this geographic split comes down to inventory. In declining Sun Belt markets, active housing inventory has exceeded pre-pandemic 2019 levels, giving buyers more choices and more leverage to negotiate prices down. In the still-rising Northeast and Midwest markets, active inventory remains well below pre-pandemic 2019 levels, maintaining the competitive conditions that drive prices upward.
This is not a mystery or a sign of irrational markets. It is basic supply and demand. Florida and Texas built aggressively during the boom and attracted enough new construction to eventually tip the balance toward buyers. The Northeast and parts of the Midwest never saw the same construction surge, and their tighter supply continues to support prices. This matters for anyone considering a move or a purchase. Buying in a market where inventory is still constrained carries different risks than buying in a market where supply is flooding in. Neither is inherently better or worse, but the dynamics are fundamentally different and should inform strategy accordingly.
What Rising Inventory Means for Buyers and Sellers in 2026
U.S. active housing inventory is up 8 percent year-over-year as of March 2026, though the rate of growth keeps decelerating. For buyers, more inventory generally means less competition, more time to make decisions, and greater ability to negotiate on price or terms. For sellers in affected markets, it means longer days on market, more price reductions, and the need to price realistically from the start rather than testing aspirational listing prices. There is a meaningful tradeoff at play for prospective buyers considering whether to act now or wait. On one hand, affordability has genuinely improved in some respects. Zillow reports that the monthly mortgage payment on a typical U.S.
home is now 8.4 percent less expensive than a year ago, driven primarily by lower mortgage rates. On the other hand, in markets where prices are still falling, buying now could mean purchasing an asset that continues to depreciate in the near term. In markets where prices are rising, waiting could mean paying more. The calculus is entirely local. A buyer in Cape Coral faces a fundamentally different decision than a buyer in Hartford. Blanket advice about whether it is a good time to buy or sell is essentially useless in a market this fractured. Sellers in declining markets should pay particular attention to comparable sales from the last 60 to 90 days rather than relying on what their neighbor got six months ago. Pricing based on stale data in a declining market is one of the fastest ways to watch a listing go stale.
Florida Markets Face the Highest Risk of Further Declines
Florida deserves particular scrutiny because the state combines several compounding risk factors beyond simple supply-and-demand imbalances. Cotality has specifically flagged five Florida metros as being at the highest risk for further price declines: Cape Coral-Fort Myers, Deltona-Daytona Beach, Lakeland-Winter Haven, Palm Bay-Melbourne-Titusville, and West Palm Beach-Boca Raton. With the state already posting negative 2.36 percent year-over-year appreciation, the worst-performing state among those tracked, these metros could see steeper losses ahead.
The compounding factors in Florida include skyrocketing property insurance costs, rising HOA fees driven partly by post-Surfside condo safety legislation, and the state’s ongoing exposure to hurricane risk that insurers are increasingly pricing into premiums. A home might look affordable based on its sale price, but the total cost of ownership in many Florida markets has risen dramatically due to these non-mortgage expenses. Buyers should be cautious about viewing Florida price declines as straightforward bargains without carefully evaluating insurance availability and cost, flood zone designation, and any pending special assessments for condos. A lower purchase price does not necessarily mean a lower total housing cost, and this distinction is catching many buyers off guard.
National Price Growth Has Essentially Flatlined
The near-zero national price growth figure deserves emphasis because it represents a dramatic shift from the double-digit appreciation that defined 2021 and 2022. Going from 2.6 percent annual growth to 0.2 percent in the span of a single year is a sharp deceleration, even if prices have not technically turned negative at the national level. For context, the 0.4 percent month-over-month decline in the Zillow Home Value Index in January 2026 means that on a seasonally adjusted basis, the national market is contracting, not growing.
The year-over-year figure remains barely positive only because of gains earlier in the trailing twelve months. This matters for homeowners relying on appreciation to build equity, for investors modeling returns on rental properties, and for local governments whose tax revenues are tied to assessed property values. A market that is not appreciating is not necessarily in crisis, but it does change the financial math for virtually every stakeholder in the housing ecosystem.
What Forecasters Expect for the Rest of 2026
The major forecasting firms are cautiously optimistic that the worst of the correction is behind us, though none are predicting a return to rapid appreciation. Zillow forecasts home values to rise 1.2 percent nationally in 2026 and projects that the number of major markets seeing annual price declines will drop from 24 of the 50 largest metros to just 12 by year-end. Redfin expects the median U.S. home-sale price to rise 1 percent year-over-year in 2026, calling this period “The Great Housing Reset.” These forecasts suggest stabilization rather than recovery, and they come with significant caveats.
Mortgage rates, employment trends, and broader economic conditions could all shift the outlook. The stabilization in declining market counts, hovering around 100 of 300 since mid-2025, lends some support to the idea that the correction is finding a floor rather than deepening. But for individual markets like Austin or Cape Coral-Fort Myers that are still well below their peaks, a return to prior highs is likely years away, if it happens at all. Buyers and sellers should plan based on current conditions rather than hoping for a quick rebound.
Conclusion
The U.S. housing market in early 2026 is defined by divergence. One-third of the 300 largest markets are experiencing price declines, concentrated in Sun Belt states where inventory has surged past pre-pandemic levels, while Northeast and Midwest markets with constrained supply continue to appreciate. National price growth has effectively flatlined at 0.2 percent year-over-year, masking a reality in which some metros are down nearly 9 percent while others are up nearly 7 percent.
The pandemic boom is over in much of the country, but it never fully arrived in some regions that are now outperforming. For consumers navigating this market, the most important takeaway is that all real estate is local, and that truism has rarely been more literally true than it is right now. Buyers in declining markets have leverage they have not had in years but should be cautious about catching a falling knife, particularly in Florida where insurance and carrying costs add hidden expenses. Buyers in rising markets face continued competition but benefit from relative price stability. Regardless of location, anyone making a housing decision in 2026 should be working with current, hyperlocal data rather than national headlines that obscure more than they reveal.
Frequently Asked Questions
Are we in a national housing market crash?
No. While 100 of the 300 largest markets have declining prices, this is a regional correction concentrated in Sun Belt states, not a broad national crash. National prices are still marginally positive at 0.2 percent year-over-year, and many Northeast and Midwest markets are posting solid gains. The pattern looks more like a market rebalancing than a 2008-style collapse.
Which states have the worst home price declines?
As of December 2025 Cotality data, Florida leads at negative 2.36 percent year-over-year, followed by Colorado at negative 1.31 percent, Hawaii and Utah tied at negative 1.11 percent, and Texas at negative 1.09 percent. Within these states, individual metros like North Port-Sarasota, Florida (negative 8.6 percent) and Austin, Texas (negative 2.5 percent recently, down 27.8 percent from peak) are significantly worse than state averages.
Is now a good time to buy a house?
It depends entirely on the market. In declining Sun Belt metros, buyers have more negotiating power and lower mortgage payments (down 8.4 percent from a year ago), but risk further price drops. In appreciating Northeast and Midwest markets, waiting could mean paying more. Evaluate local inventory levels, your personal financial situation, and how long you plan to stay rather than trying to time the national market.
Will home prices recover in Austin and Florida?
Forecasters like Zillow and Redfin project modest national price gains of 1 to 1.2 percent in 2026, and the number of declining major markets is expected to shrink. However, markets like Austin, which is 27.8 percent below its 2022 peak, and Cape Coral-Fort Myers are unlikely to return to prior highs anytime soon. Recovery in these areas will likely take years and depends on inventory stabilization and sustained demand.
Why are Midwest and Northeast home prices still rising?
Active housing inventory in these regions remains well below pre-pandemic 2019 levels, maintaining competitive conditions for buyers. Unlike Sun Belt states, the Northeast and Midwest did not see the same level of new construction during the pandemic boom, so supply never caught up with demand. Hartford, Connecticut, for example, is up 21.2 percent from its 2022 levels.