The housing market in the United States has seen values go up over the past years, but properties in some markets could see plummeting prices by the end of 2025.
Nationwide, home prices rose 3.1% year-over-year in August, per Redfin. The median sale price of a home is $433,229. That fell from the median sale price of $442,000 in June.
Lower housing prices could translate to better deals and more negotiating power for buyers. For sellers, however, it means less profit when they plan to sell.
Housing Markets Where Values Could Soon Fall
Here are the five housing markets where home values could soon fall before the end of 2025, according to GoBanking Rates.
Dallas, TX
Median Home Price: $390,000
Year-Over-Year Change in Median Home Price: -2.3%
Average Time on the Market: 42 days
San Antonio, TX
Median Home Price: $268,000
Year-Over-Year Change in Median Home Price: -2.7%
Average Time on the Market: 46 days
Austin, TX
Median Home Price: $548,000
Year-Over-Year Change in Median Home Price: -0.45%
Average Time on the Market: 67 days
Phoenix, AZ
Median Home Price: $450,000
Year-Over-Year Change in Median Home Price: +2.4%
Average Time on the Market: 51 days
Boise, ID
Median Home Price: $490,000
Year-Over-Year Change in Median Home Price: +3.2%
Average Time on the Market: 29 days
Factors Affecting Home Values
Home values may decline due to various factors, both economic and local. For instance, rising interest rates lead to an increase in buyers' borrowing costs. This, in turn, reduces demand for homes and leaves properties for sale sitting on the market for longer. These conditions will lead to lower home prices.
A weak economy, often marked by high unemployment rates and low consumer confidence, would decrease demand for housing and also cause home prices to fall.
When it comes to local factors, neighborhood conditions, and environmental concerns can affect home values. High crime rates, poor schools, a lack of amenities, or proximity to landfills and power plants can decrease a home's desirability, negatively impacting home values.
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