Home prices dropped in dozens of big U.S. cities this year. Here’s where.

The real estate market in the U.S. is experiencing a reset in some areas, with median sale prices dropping in about one-third of major cities this year. According to a report from real estate data company ATTOM, median sale prices decreased in the first three months of 2026 in 39 out of the largest 129 cities across the country. Many of these cities are located in Florida, California, and Southwestern states, with the biggest decline seen in Florida’s Cape Coral-Fort Myers region, where the median home sale price fell by 9% to $341,250 compared to the previous year.

One of the reasons for the price declines in these cities is the significant run-ups in home valuations during the pandemic, such as in Austin, Texas. Additionally, rising homeowners’ insurance and property taxes are putting pressure on some metro areas, leading to price decreases. Jake Krimmel, a senior economist at Realtor.com, noted that the metros in the south and west, particularly in Florida, are struggling to maintain their high home prices after the pandemic boom.

Bryce Ocepek, a broker in northeast Florida, mentioned that homes in certain pockets of the state are selling quickly when priced correctly. However, if a seller lists their home at a high price initially, it often ends up selling for less than its actual value after multiple price drops. Ocepek highlighted the challenges faced by sellers in the current market, where buyers have the upper hand due to increased leverage.

Florida homeowners are also grappling with high insurance rates, particularly in areas prone to hurricanes. According to Insurify, Florida has the highest homeowners’ insurance rates in the country, with the average premium jumping by 18% to $8,292 last year. The southern part of the state, including counties like Monroe, Miami-Dade, and Palm Beach, has the highest insurance premiums due to the hurricane risk.

The recent reevaluation of flood zones in Florida following a hurricane has led to spikes in insurance premiums, causing some homeowners to sell their properties. Ocepek mentioned that some homes have become uninsurable due to hurricane damage, leading to significant devaluations. This factor, along with concerns about housing affordability, has prompted about half of Floridians to consider leaving the state.

While some cities saw rising home prices in the first quarter of 2026, especially in the Rust Belt, the overall real estate market in the U.S. is shifting towards a more buyer-friendly landscape. Krimmel noted that financing is more affordable this spring, with mortgage rates hovering around 6.3%. Sellers are adjusting their expectations and listing prices are coming down, making it a better time for buyers to enter the market.

Overall, the real estate market is experiencing a normalization phase, with median prices decreasing and more homes available for sale. This shift is providing relief to house hunters who have faced challenges in recent years. With mortgage rates still lower than a year ago, buyers have the opportunity to explore the market and find a home that fits their needs at a more reasonable price.