More Than Half of U.S. Homes Have Lost Value Over the Past Year
For the first time since 2012, more than half of homes across the United States have declined in value over the past year. According to Zillow data, as of October, 53% of homes in the country are worth less than they were a year ago. This marks the largest share of depreciating homes since the aftermath of the Great Recession.
Nationally, home price appreciation has been nearly flat, but this figure hides significant regional differences. Prices are dropping in much of the Southeast and parts of the West, while many cities in the Midwest and Northeast are still seeing gains.
Why Are Home Values Falling?
Home prices have cooled across much of the country as inventory has increased, but buyer demand has not kept pace. Economic uncertainty, mortgage rates above 6%, and a persistent price standoff between buyers and sellers have kept many would-be buyers on the sidelines.
Hardest-Hit Metro Areas
Metro areas with the highest share of homes that have lost value are often those that saw rapid growth during the pandemic or expanded housing supply aggressively in recent years. In Denver, 91% of homes have dropped from their peak values, followed by 89% in Austin, Texas, and 88% in Sacramento, California. Over 80% of homes in Jacksonville, Orlando, and Tampa, Florida, have also lost value, along with 87% in Dallas and 86% in San Antonio.
Affordability Improves for Buyers
“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.” The average drop from peak home values is 9.7%, a bigger setback than in recent years but similar to pre-pandemic swings—and far from the kind of crash seen in 2012, when values plunged as much as 27% from their highs.
Most Homeowners Still Have Equity
Despite the downturn, most homeowners are still sitting on significant equity gains. The median increase in home equity is 67%, thanks to the rapid price surge over the past six years. Only 4.1% of homes have lost value since their last sale—a lower percentage than before the pandemic.