The U.S. housing market is pulling in two directions at once. In half of the country’s largest metro areas, home values are still rising. In the other half, prices are dropping.
For anyone wondering if it’s a good time to buy, the answer now depends entirely on location.
According to Zillow’s report, home values increased year over year in 25 of the 50 largest U.S. metro areas, mostly in the Midwest and Northeast.
Meanwhile, values fell in the other 25, largely in the South and West. This divide shows just how regional the market has become.
“Perhaps more than ever, whether it’s a good time to buy depends on where you live,” said Kara Ng, senior economist at Zillow.
“A defining trait of this market is that buyers are gaining leverage that most of them can’t use, because cost barriers are too high.”
Despite growing leverage, many potential buyers are still priced out.
Monthly mortgage payments are down slightly, about $19 lower than a year ago, but the typical payment is still nearly $1,000 more than before the pandemic.
Where Prices Are Rising
In cities like Cleveland, Hartford, Louisville, Detroit, and Buffalo, home values rose between 3.7% and 4.7% over the past year.
Demand is high, especially in affordable areas, but new construction is limited by zoning laws and land-use restrictions. Inventory remains low, which keeps prices up.
Where Prices Are Falling
Southern and Western cities like Tampa, Austin, Miami, Orlando, and Dallas have seen some of the biggest price drops. Tampa saw the largest decline, with home values down 6.2% over the past year.
These markets were booming during the pandemic, but things have cooled off. There’s more inventory now, mostly because builders were able to put up homes quickly over the past few years.
Fewer local restrictions made it easier to build, which helped take some pressure off prices and made homes a bit more affordable for those still in the market.
Listings Are Lingering, and Price Cuts Are Common
Homes are sitting on the market longer than in recent years. The median listing age in July was 60 days, the highest for any July in Zillow’s records since 2018.
Only homes priced competitively and marketed well, think 3D tours and floor plans, are moving quickly.
Sellers are reacting by slashing prices. A record 27.4% of listings had a price cut in July, with cuts especially common in the South and Mountain West.
Less Competition, More Choices
Zillow’s market heat index shows buyer competition hit its lowest point for any July since at least 2018.
Now, 27 large markets are considered either balanced or tilted in buyers’ favor, up from 24 last month.
Cities like Miami, Jacksonville, Austin, and New Orleans are now among the strongest buyer’s markets.
Still, a national housing deficit of 4.7 million units remains.
Even with new construction easing conditions in some areas, prices won’t return to pre-pandemic levels across the board any time soon.
Bottom Line: It Depends Where You Live
For those looking to buy a home in 2025, the market looks very different depending on the metro.
In some areas, prices are still climbing with little inventory relief. In others, more choices and falling prices offer a chance to negotiate, but only for buyers who can afford to act.
As Kara Ng put it, “It’s not just about giving buyers power, it’s enabling them to use it.”