Business
Home Prices Drop Significantly in Cities Across the U.S.

The U.S. housing market is experiencing notable declines in home prices, with certain cities reporting significant drops over the past year. According to data from Realtor.com, the median list price for a typical single-family home in the United States reached $440,950 in June 2025, reflecting a staggering increase of over 47% since early 2020. This surge has exacerbated the ongoing housing affordability crisis, leaving an estimated 75% of American households unable to afford a typical home.
As wages have not kept pace with the rapid rise in home prices, with a mere 1.6% increase for full-time workers since early 2020, the imbalance between income growth and housing costs has led to a crisis in affordability. The National Association of Home Builders indicates that many households are now facing substantial financial burdens when seeking to purchase a new home. Amid these challenges, some areas across the country are starting to see a reduction in home prices, providing potential opportunities for buyers.
Cities Where Home Prices Are Falling
Using historical data from Realtor.com, the financial news site 24/7 Wall St. identified cities in each U.S. state where home prices have decreased over the past year. The analysis covered over 920 metro areas, focusing on the relative change in median single-family home list prices from June 2024 to June 2025. Notably, five states — Alaska, Maine, Oklahoma, Rhode Island, and Vermont — were not included in the analysis as no cities within those states experienced a decline. Additionally, due to limited data, Hawaii is represented by a single metro area.
Among the 45 cities identified, median list prices have fallen between approximately 1% to nearly 10% since June 2024. Although home prices are declining in 19 states, the cities listed have witnessed sharper reductions compared to statewide averages. It is crucial to recognize that even with these decreases, many cities still maintain relatively high median list prices, with 12 cities exceeding $500,000 in median list price.
For instance, in Alabama, Montgomery saw a 7.9% drop in local median list price, bringing it down to $298,457, compared to $324,000 a year earlier. In contrast, the statewide median list price experienced a slight increase of 0.3%, reaching $340,000.
In California, Ukiah reported the most significant decrease in the state, with a drop of 9.9%, bringing the median list price to $635,000 from $705,000. Similarly, Florida’s Cape Coral-Fort Myers observed a 6.2% decline, resulting in a median list price of $424,950.
The Bigger Picture of U.S. Housing Prices
The median home price in the United States has soared to $121,000 higher than it was five years ago, pushing many Americans out of the market entirely. Yet, as some cities report substantial decreases in home prices, potential homeowners may find a reprieve.
Despite these reductions, the overall trend in the housing market remains concerning. The affordability crisis is not expected to ease significantly unless wages rise in tandem with housing prices. Until then, the cities with falling home prices may offer critical insights into potential opportunities for buyers navigating a challenging market.
As the housing landscape continues to evolve, monitoring these trends will be essential for both potential buyers and real estate professionals.
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