Half of America's Biggest Housing Markets Just Saw Price Drops. Here's What's Happening.
For most of the past five years, home prices seemed to move in only one direction: up. But a new report from Zillow paints a different picture. Half of the nation's 50 largest metro areas experienced year-over-year price declines as of early 2026.
That headline might sound alarming, but the reality is more nuanced. What we are seeing is not a crash. It is a correction, and depending on where you live, it could be very good news.
Where Prices Are Falling
The markets seeing the steepest pullbacks share a common thread. They are places that experienced some of the most dramatic price spikes during the pandemic boom and, in many cases, saw a surge in new construction that has now tipped the supply balance.
Texas and Florida stand out. Cities like Austin, San Antonio, Dallas, Jacksonville, and Tampa all saw aggressive building activity over the past few years. That new supply, combined with the cooling effect of higher insurance costs and property taxes in some of these areas, has pushed prices down modestly. In Austin, for example, the median home price has dropped roughly 18% from its pandemic peak near $550,000, with losses extending for a third consecutive year.
Parts of the Mountain West are also softening. Markets like Denver, Phoenix, and Salt Lake City, which were among the hottest destinations for remote workers during 2020 and 2021, have seen some of that demand normalize.
Where Prices Are Still Climbing
While some formerly hot markets cool off, other regions are picking up steam. The Midwest has emerged as a surprising pocket of strength. Cities like Columbus, Ohio, Indianapolis, and Kansas City are posting outsized price gains, driven by relative affordability, strong local job markets, and limited new construction compared to the Sun Belt.
Parts of the Northeast are also holding firm. Markets with constrained land and limited new building, like much of the New York metro area and parts of New England, continue to see steady appreciation simply because there are not enough homes to meet demand.
What This Means for Buyers
If you are shopping in a market where prices have softened, this is an opportunity. You have more negotiating power than buyers have had in years. Sellers are more willing to come down on price, cover closing costs, or make repairs that would have been off the table in a hotter market.
If you are in a market where prices are still rising, the calculus is different but still favorable. Buying now locks in today's price before further appreciation pushes it higher. And with mortgage rates near three-year lows, your total cost of ownership is better than it has been in a long time.
What This Means for Sellers
If your local market has softened, pricing your home correctly from the start is more important than ever. Overpriced listings sit, and every week on the market erodes buyer interest. The good news is that well-priced homes in good condition are still selling at a healthy pace, even in softer markets.
The Big Picture
The housing market is not one market. It is hundreds of local markets, each with its own dynamics. National headlines can be misleading. What matters is what is happening in your specific area.
Curious how your local market is performing? Let's look at the data together and figure out what it means for your next move.