Home values are falling for more than half of the nation, the biggest share in more than a decade, when the US was still struggling to claw out of the Great Recession.
As of October, 53% of homes in the country had lost value in the past year, according to Zillow data. Nationally, home price appreciation has been roughly flat, but that figure masks large regional disparities. Home prices are falling in much of the Southeast and parts of the West, while they’re rising in many cities in the Midwest and Northeast.
Prices have been cooling in much of the country this year as inventory levels have climbed, but buyer demand hasn’t materialized. Many would-be buyers have remained on the sidelines amid economic uncertainty, mortgage rates above 6%, and an ongoing price standoff with sellers.
Metro areas with the greatest share of homes that have lost value include many one-time pandemic boomtowns and regions that have aggressively expanded their housing supply in recent years. In Denver, 91% of home values have dropped from their peaks, followed by 89% in Austin, Texas, and 88% in Sacramento, Calif.
More than 80% of homes in the Florida cities of Jacksonville, Orlando, and Tampa have also lost value, along with 87% in Dallas and 86% in San Antonio.
“This is the best news for buyers in a very long time,” said Mischa Fisher, Zillow’s chief economist. “We’re now at a three-year peak for affordability.”
Across the country, the average drop from peak valuations is 9.7%. That’s larger than pricing setbacks seen in recent years, but on par with pre-pandemic fluctuations. It’s also far from a crash. Back in 2012 — the last time this many homes were depreciating — values cratered as much as 27% from their precrisis highs.
Another key difference: Few homeowners are taking big losses now. Most homeowners are still sitting on major equity gains — the median increase is 67%, according to Zillow — especially given the rapid run-up in home prices in the last six years.
Crucially, only 4.1% of homes have lost value since they were last sold, a smaller percentage than before the pandemic.
“Sellers obviously all want more equity,” Fisher said. “But as long as you’re strategic about the timing when you sell, people don’t necessarily have to realize a real loss.”
