The real estate market is constantly evolving, and while home prices in some areas remain high, others are seeing a significant decline. According to Realtor.com, the median home price in the U.S. dropped slightly in December 2024, falling to $402,502 from $410,000 in the previous year.
Although affordability challenges persist, buyers in certain metro areas now have a unique opportunity to purchase homes at lower prices. A slowdown in demand, influenced by high mortgage rates and rising financing costs, has led to reduced competition in several markets, encouraging sellers to lower their prices.
Among the cities experiencing the steepest declines, San Francisco, Miami, and Austin saw some of the biggest year-over-year price drops. Let’s explore the 11 U.S. cities where home values have fallen the most.
Why Are Home Prices Dropping in These Cities?
Over the past few years, cities like Miami and Austin became hotspots for buyers seeking affordability and more space. However, as demand has cooled, homes are now lingering on the market for longer periods, forcing many sellers to reduce asking prices.
The combination of:
- Persistently high mortgage rates,
- Increased financing costs, and
- A more cautious approach from buyers
…has contributed to the downturn in several major metro areas.
While the market remains uncertain, those looking to buy may find good deals in cities where home values have seen substantial declines.
Cities with the Biggest Home Price Declines
11. Nashville, Tennessee
- Median home price: $537,450
- Year-over-year change: -3.9%
10. Orlando, Florida
- Median home price: $419,950
- Year-over-year change: -4.3%
9. Cincinnati, Ohio
- Median home price: $319,050
- Year-over-year change: -4.8%
8. Phoenix, Arizona
- Median home price: $499,995
- Year-over-year change: -5.1%
7. Denver, Colorado
- Median home price: $577,350
- Year-over-year change: -5.4%
6. Jacksonville, Florida
- Median home price: $384,500
- Year-over-year change: -5.7%
5. Tampa, Florida
- Median home price: $395,000
- Year-over-year change: -6%
4. Kansas City, Missouri
- Median home price: $369,995
- Year-over-year change: -7.5%
3. Austin, Texas
- Median home price: $498,500
- Year-over-year change: -7.7%
2. Miami, Florida
- Median home price: $522,500
- Year-over-year change: -9.9%
1. San Francisco, California
- Median home price: $889,500
- Year-over-year change: -10.9%
Is Now the Right Time to Buy?
While there may never be a perfect time to buy a home, those in the market for a new property could benefit from these price drops. Less competition, coupled with sellers willing to negotiate, means buyers in these cities have better chances of securing favorable deals.
However, affordability remains a challenge due to higher borrowing costs. Prospective homeowners should carefully assess their financial situation, interest rates, and local market trends before making a decision.
Final Thoughts
The U.S. housing market continues to shift, and these 11 cities have seen the sharpest declines in home prices over the past year. While sellers may be adjusting expectations, buyers with stable financing and long-term plans may find 2025 to be a great opportunity to purchase property at a discount.
Whether you’re buying, selling, or waiting on the sidelines, staying informed about housing trends will help you make smarter real estate decisions.