On August 1, 2025, a new Redfin report revealed that home prices have declined across 14 of the 50 largest U.S. metropolitan areas, signaling a shift toward buyer-favorable conditions in previously overheated housing markets.
At the forefront of this downward trend is Oakland, California, where prices plunged 6.8% year-over-year, the sharpest drop among these metros. Other notable declines include West Palm Beach, Jacksonville, Austin, and Houston, each seeing price contractions ranging from 2.8% to 4.9%.
Despite this metro-level cooling, home prices at the national level posted a modest 2% increase year-over-year. However, Redfin forecasts a reversal later in 2025, projecting a 1% decline in median U.S. home prices by year’s end.
The median asking price has slipped to a five-month low, and the monthly mortgage payment has dropped to around $2,671, the lowest since January 2025.
Inventory and demand dynamics are driving the shift. Homes in markets like West Palm Beach are spending longer sitting unsold—the median time on market reached 93 days in July, up 18 days from the previous year. That slowdown has given buyers more negotiating power.
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Touring activity has surged about 35% since January, yet overall mortgage-purchase applications and buyer demand remain muted, underscoring persistent affordability challenges.
Redfin reports that pending home sales are down—for instance, a 1.7% year-over-year decline nationwide—and up to 14% of pending deals are being canceled in some regions, matching highs seen during previous market disruptions.
Meanwhile, active listings are climbing, with a roughly 12% increase year-over-year and new listings up nearly 3.9%, fueling the shift in bargaining power toward buyers.
While markets such as Oakland experienced the steepest year-over-year declines, other metro areas in Florida and Texas have also softened. For example, Jacksonville and Houston saw notable dips, aligning with broader weakening demand and rising supply.
In Texas specifically, cities including Austin, Dallas, San Antonio, and Fort Worth showed year-over-year median price drops, ranging from 4–5% in Austin to smaller declines elsewhere. These changes are rooted in economic uncertainty, reduced buyer interest, and higher mortgage rates near 6.7% to 6.8%.
For many buyers, this market shift offers opportunities to negotiate price reductions, request seller concessions, and secure better terms than were possible during the peak of the competitive housing boom. The decline in mortgage payments offers some relief, though many still struggle with high overall housing costs.
Redfin predicts home prices will begin showing year-over-year declines more broadly in the second half of 2025. This expectation is based on improving wage growth and slight easing in affordability metrics, though conditions remain challenging for first-time buyers and those in high-cost metros.
While earlier forecasts predicted a 4% increase in home prices for 2025, current market indicators suggest the trajectory may be more subdued or even negative by year-end. Rising inventory, slower sales, and increased deal cancellations all point toward a more balanced housing environment compared to recent years.
For homebuyers, now may be a rare window to strike favorable deals in select metros. But the broader market remains fragile, and the long-awaited turnaround in affordability may still be months away.
