Home values are falling for more than half of Americans, the largest share since the country was still struggling to emerge from the Great Recession.
New data from Zillow shows that 53 percent of U.S. homes have lost value over the past year, the highest level since 2012, when the housing crisis finally bottomed out.
On paper, the national market looks flat, but this average masks huge differences between regions, cities and even districts.
Prices are falling across much of the South and West as more homes come on the market and buyers remain on the sidelines.
Many potential buyers are holding off amid persistently high recession fears. mortgage rates above 6 percent, as well as confrontations with sellers who refuse to lower their asking prices.
Many of the biggest declines are occurring in cities that were once red-hot by the pandemic boom. In Denver, 91 percent of homes have fallen from their peak values. In Austin, the rate is 89 percent, and in Sacramento it is 88 percent.
Florida has also been hit hard, with more than 80 percent of homes in Jacksonville, Orlando and Tampa now worth less than they were a year ago. Dallas and San Antonio also saw declines of more than 85 percent.
The Zillow report echoes a similar report from S&P Cotality Case-Shiller which looked at the 20 largest US metros, and found that nine people had seen house prices fall.
This map charts the downturn in the U.S. housing market, highlighting the metros where the largest share of home values have fallen over the past year.
Tampa is experiencing one of the most dramatic changes in Florida, with more than 80 percent of homes now worth less than they were a year ago. The rapid rise in prices in the city gave way to a sharp correction in most of the metro.
Treh Manhertz, senior economics researcher at Zillow, says the recession is “a normalization, not a collapse.”
Nationwide, the average drop from the peak estimate is 9.7 percent—sharper than the small drop seen in 2022, but still a far cry from the 27 percent collapse recorded after 2008.
Despite the widespread decline, very few homeowners are actually underwater.
Nationally, the average increase since the last home sale was 67 percent. In some markets, including Buffalo, San Jose, Providence, Columbus and San Diego, the cost has doubled over time.
Owners tend to stay in these cities longer, allowing them to build equity quickly.
In general, very few Americans own a home that is worth less than they paid for it. Just 4.1 percent of U.S. homes are now valued below their last sale price, down from pre-pandemic levels.
Even among new listings, only 3.4 percent are selling for less than the original amount the seller paid—about half the price in 2019.
The markets with the most listings below previous sales prices are those that have grown the fastest during the pandemic, including San Francisco, Austin and San Jose.
But in many metros in the Northeast, Midwest and Great Lakes region, less than 2 percent of sellers are losing money.
Denver saw the sharpest decline in the country, with 91 percent of homes down from their peak values. The Mile High City was once a pandemic boomtown, but rising supply and weakening demand have now led to sharp declines in prices.
Dallas, long one of the strongest housing markets in the South, has not escaped the downturn. About 87 percent of homes are down from their peak values as a flood of new supply and higher borrowing costs weigh on demand.
Austin's red-hot housing market has cooled sharply, with 89 percent of homes now worth less than they were at their peak. The Texas capital was one of the nation's fastest-growing metropolitan areas during the pandemic, but is now struggling with oversupply and falling consumer demand.
A surge in for-sale signs hasn't brought back buyers – and prices are now falling across much of the country.
Zillow says that while the pullback is alarming, it is not a sign of another crash.
“Homeowners may feel anxious when they see Zestimate prices drop,” said Treh Manhertz, senior economic researcher at Zillow.
“But relatively few sell at a loss. Home values have risen over the past six years, and the vast majority of homeowners still have significant equity. What we are seeing now is normalization, not collapse.”
For homeowners, the situation is mixed: Values may be falling from their highs, but most people still have plenty of equity. For buyers, the market remains stuck, with prices falling but not enough to offset high mortgage rates or spark a surge in buying.
