Declining Home Prices Mapped: 89 Cities with Falling Prices

Heard nothing but doom and gloom in the real estate headlines for the last 18 months?

The wild 50+% price jumps we saw during the pandemic are a distant memory, while 2022 through 2025 have seen real estate markets drop back down to earth. They did exactly what markets are supposed to do: they corrected.

So where are property prices dropping? Because we love you, we keep updating our interactive maps of falling real estate values each quarter.

Cities with Dropping Home Prices

If a picture is worth a thousand words, how much is an interactive map worth?

89 cities saw declining home prices, with around 60 seeing more than a 1% drop. As with last year, Greenville, MS, saw the biggest drop YOY at more than 15%, followed by Big Spring, TX, at 13%. These are the only two cities with double-digit drops. 

On the other hand, median home prices across the US increased by 2%. Interestingly, both Greenville and Big Spring have lower median prices that overall US numbers, which indicates that the largest percentage drops are still occurring in more affordable markets.

State-wise, Florida and Texas had the most cities with declining home prices, reflecting a broader cooling trend in some of the Sun Belt’s previously red-hot markets. In Florida, cities such as Cape Coral, Palm Bay, and North Port saw notable declines, reversing the steep appreciation seen during the pandemic boom.

These corrections suggest that some overheated markets are now adjusting to more sustainable pricing levels. In both states, the combination of rising insurance costs, elevated property taxes, and high mortgage rates may be putting downward pressure on home values, especially in mid-tier and entry-level segments.

Without further ado, the U.S. cities seeing year-on-year home value declines are:

Clearly, some previously ebullient housing markets are still correcting to more sustainable levels.

Keep your finger on the pulse of real estate markets and housing corrections nationwide as you navigate investing in this weird economy. 

What About Declining Rents?

Compared to last quarter when only six cities saw declining rent, a growing number of U.S. cities are experiencing significant drops. This downward shift may indicate a cooling rental market driven by increased supply, shifting demand, and uncertain economic conditions. We’d have to keep our eye on the numbers before making a sure call, but this trend is a bit alarming. 

Take a look at the interactive map:

Federal Heights, CO, took the biggest hit with a steep 9% decline, while Anderson Mill, TX, wasn’t far behind at almost 7%. 

On the flip side, about half the cities on this list — roughly 45% — dipped by less than 1%, showing a bit more stability despite the broader downward trend.

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Why Did House Prices Decline in the First Place?

Two hundred of the formerly hottest housing markets in the pandemic fell back down to earth over the last year. It doesn’t take a senior economist to understand that they shot up too far, too fast, and now they’re correcting back to what local incomes can support.

“Monetary stimulus during COVID distorted the real estate market,” explains Andrew Lokenauth, founder of Fluent in Finance. “Interest rates were at historic lows. Now with monetary stimulus being withdrawn, home prices will gradually decline. Areas that saw the greatest speculation and increase in prices will see the greatest decrease in prices. Areas that saw moderate price increases will see prices flatten out or decrease slightly.”

Because, ultimately, people have to be able to afford their homes. When housing prices stray too far from local median incomes, expect real estate prices to drop. Mark Zandi, the chief economist for Moody’s Analytics, warned that 97% of the nation’s cities are “overvalued” compared to local incomes. Of the 392 markets they analyzed, 149 are overvalued by at least 25%. Zandi expects the most overpriced housing markets to fall as much as 10% over the next year.

But a disconnect from local fundamentals isn’t the only reason median prices are dipping in some markets.

The Role of Rising Interest Rates

When the Federal Reserve raises interest rates, it puts upward pressure on mortgage rates. That, in turn, drives up the cost to own real estate in the form of higher monthly payments for the same loan amount.

Which means people just can’t afford to pay as much for properties.

Mortgage interest rates started 2022 at around 3%, then more than doubled to close the year around 6.5%. Over 2023 and 2024, mortgage rates hovered between 6-7.5%.

That marks a huge leap in monthly costs for homebuyers and real estate investors alike. Consider that a 30-year $400,000 loan at 3% interest costs $1,686 per month, while the same loan at 6% costs $2,398. Interest alone added over $700 to the monthly mortgage payment!

At a 6% interest rate, a family could only borrow around $280,000 if they wanted a similar monthly payment ($1,679). So, rising interest rates force buyers to either pay cash, offer less, look at cheaper homes, or sit on the sidelines and continue renting.

None of which push up property prices. Quite the opposite, in fact.

Real Estate Prices to Drop Further?

High borrowing costs have continued suppressing demand for homes, and driving a drop in prices in some markets. Even so, fewer US cities have seen annual price declines in each of the last four quarters. That indicates that the housing correction has largely passed.

Those cities where home prices skyrocketed by 40​​–50% annually during the pandemic? They’ve already come back down to earth, some by between 10–25%. They overshot what local prospective buyers can afford, and the correction has come for them.

Remote work plays a role as well, in multiple ways. Some people (like me!) will never work in a traditional office again. “With the workforce moving increasingly towards hybrid and remote workplaces, many people are moving out of cities and into less dense areas, investing in more rural real estate,” explains Matt Woods, CEO of SOLD.com.

But the reversal of remote work is also at play. Plenty of employees are heading back to the office, which means that many of those beach and mountain getaways where people holed up during the pandemic have surrendered some of their price gains.

Underlying these population movements, the US still has a housing shortage, and it’s not evenly distributed. Don’t expect nationwide home prices to crash 20​​–35% as they did after the housing bubble of the Great Recession.

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The (Continued) Housing Shortage

Real estate platform Homelight notes that 12.3 million households were formed between January 2012 and June 2021, but only 7 million new housing units were built. That leaves a shortfall of over five million homes. (For more details, check out their breakdown of why the US has a housing shortage.)

Don’t expect housing supply to jump any time soon, either. Housing starts have declined for five consecutive months, entering 2023 near their lowest level since August 2020.

Fret Over the Fall in House Prices?

The US still needs more housing, so don’t expect declining home prices to freefall into a 2008-style housing crash nationwide. Still, some markets saw home prices spike too far, too fast, and are now adjusting back to reality.

One piece of good news? Rents seldom dip, so rental properties are largely recession-proof. Rent growth has slowed, but don’t expect rents to collapse any time soon. 

Keep an eye on your home real estate market’s trends. But most of all, watch out for flipping houses right now, and stick with a long-term buy and hold strategy. You can forecast long-term cash flow accurately with a rental income calculator — the same can’t be said for predicting appreciation.♦

Where do you expect real estate prices to drop? Why?

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About the Author

G. Brian Davis is a real estate investor and cofounder of SparkRental who spends 10 months of the year in South America. His mission: to help 5,000 people reach financial independence with passive income from real estate. If you want to be one of them, join Brian and Deni for a free class on How to Earn 15-30% on Fractional Real Estate Investments.