Home prices are dropping in some regions of the U.S. Here’s where.

The real estate market has been facing challenges ever since the outbreak of the COVID-19 pandemic. With limited inventory, soaring home prices, and high mortgage rates, many potential homebuyers are finding themselves unable to enter the market. However, amidst these constraints, some regions in the country are experiencing modest declines in home prices.

A recent report from Realtor.com has shed light on the changes in median home prices across the 50 largest metro areas in the United States since 2022, when median home prices reached a peak of $443,000. According to the report, the extent of price declines varies from region to region, with some areas seeing more significant drops than others.

“The housing market has cooled somewhat in 2025,” stated Danielle Hale, chief economist at Realtor.com. “But the degree and sustainability of this rebalancing differ across the country. Homebuyers and sellers are likely to encounter a vastly different market depending on their region.”

One of the key factors influencing these price differences is inventory levels. Currently, the housing market can be divided into two categories – regions with higher inventory levels in the South and West, where deeper price cuts are observed, and areas with limited inventory in the Midwest and Northeast. Jake Krimmel, a senior economist at Realtor.com, explained that the supply and demand dynamics play a crucial role in determining price trends.

In cities where prices are falling, such as Austin and Miami, inventory levels are increasing as homes stay on the market longer, sellers reduce prices, and new listings rise. The boom in construction during the pandemic also contributed to a boost in housing supply in these regions. While Austin, Los Angeles, and Miami saw significant declines in median listing prices, prices in Los Angeles still remain above the 2022 levels.

On the other hand, cities in the Northeast and Midwest are facing challenges due to high prices and tight inventory. Factors like strict zoning regulations and land use laws contribute to the scarcity of new housing units. In cities like New York and Milwaukee, median listing prices have seen an upward trend. Despite some decreases in prices in cities like Boston and Philadelphia, median prices remain significantly higher than in 2022.

Overall, the real estate market exhibits a varied landscape across different regions, with some areas experiencing price declines while others see price increases. The supply and demand dynamics, along with local market conditions, play a crucial role in shaping the housing market trends. As the market continues to evolve, potential homebuyers and sellers need to stay informed about these trends to make well-informed decisions.