Home Prices Are Dropping Fast in These 5 Major US Cities

For prospective homebuyers, there are a few reasons to be hopeful that the housing market is taking a turn for the better. Top among them is home-price growth, which is slowing, and in some metros, even trending down.

A Redfin report published Monday said that home price growth posted the slowest increase since 2023 last month, at 0.7%. That’s promising news in a market that’s seen poor affordability as a barrier for many looking to buy a house.

The decrease can be attributed to buyers outnumbering sellers, leading to houses sitting on the market for longer and giving buyers an edge in the market.

In May, 15% of pending home sales were canceled, the highest level since 2017, and less than a third of homes that sold in May went for over their asking price, the lowest level in five years, Redfin said. That’s an indication that buyers are starting to gain the upper hand in negotiations.

Redfin believes this trend will continue and predicts that home prices will begin to show year-over-year declines by the end of 2025.

It’s already happening in some areas of the country, including some of the housing markets that saw the most aggressive price appreciation post-pandemic. Out of the top 50 metros in the US, 11 of them saw declining home prices.

Florida and Texas, two states that saw explosive home price growth in recent years, topped the list for the most cancellations in May. San Antonio and Orlando saw cancellation rates of 21% and 20%, respectively.

Seen as attractive, low-cost housing markets during the pandemic, these metros have experienced significant price appreciation in recent years, dampening demand.

Population inflow into Florida and Texas has dropped sharply this year due to other reasons as well: economic uncertainty, natural disasters, and return-to-office mandates are reducing buyer interest. An increase in homebuilding has also led to a greater supply of housing in Florida and Texas.

For buyers, this means it’s the perfect time to negotiate with sellers. Redfin agents recommend that buyers not disregard homes just out of their budget, as sellers could be willing to offer concessions or lower the price.

Below are the top five US cities with falling home prices, their year-over-year decline, and median sale price.