Brace yourself: the U.S. housing market is tilting toward buyers in a way we haven’t seen in years. High mortgage rates and swelling inventory are rewriting the rules, especially in once-hot markets.
According to Realtor.com, home prices dropped in 33 of the 50 largest U.S. metros in July 2025, signaling a shift driven by weaker demand and more choices for buyers, particularly in the West and South.
This trend isn’t new, but it’s accelerating. The number of markets with declining prices rose from 29 a year ago to 32 in June 2025, and now 33, per Realtor.com’s latest report. It’s a clear sign that sellers are feeling the pinch.
Pandemic-era boomtowns are taking the hardest hits. Austin, TX, saw a 4.9% year-over-year drop in median list price to $510,950, while Miami, FL, fell 4.7% to $509,950. Since 2022, Miami’s prices have cratered by 17.8%, the steepest decline among major metros.
Inventory is piling up in these cities. Homes in Austin lingered on the market for 65.5 days, up 8 days from last year, with over 31% of listings slashed in price. Miami’s typical home sat for 88 days, a whopping 16 days longer than a year ago.
Why the slowdown? Mortgage rates near 7%, high taxes, and soaring insurance costs are choking buyer enthusiasm, as one Austin broker noted. Many sellers, desperate to move properties, are cutting prices aggressively.
Other cities aren’t immune to the cooling trend. Los Angeles, CA, dropped 4.2% to a median of $1,148,000, Denver, CO, fell 4.0% to $600,000, and Chicago, IL, saw a 4.4% dip to $377,000. Nashville, TN, declined 3.5% to $544,950, with homes sitting 20 days longer than last year.
Regional differences paint a broader picture. The West and South are seeing inventory soar—Las Vegas, NV, jumped 65.7% in active listings—while the Northeast and Midwest remain tighter and more competitive.
National inventory of for-sale homes grew 24.8% year-over-year, marking 21 straight months of growth. Yet, the pace slowed in July compared to earlier months, and new listings, while up 7.3%, have declined for three consecutive months.
Buyers are gaining leverage with homes sitting longer—58 days nationally, up 7 days from last year. The West saw the biggest jump at 10 extra days on market, followed by the South at 8 days. This gives savvy buyers room to negotiate.
Sellers are adapting, though not always by choice. The share of listings with price cuts dipped to 20.6% in July from June, but in places like Denver, nearly a third of listings offered reductions, the highest among major metros.
“As markets tilt more buyer-friendly, list prices tend to follow,” noted a Realtor.com economist. It’s a simple truth: when demand softens and supply grows, sellers lose their edge.
For investors and homeowners, this shift is a wake-up call. High interest rates—artifacts of monetary policy that punish borrowers—mean monthly payments are far steeper than just a few years ago. Frugality matters now more than ever.
Consider this an opportunity if you’re in the market to buy. With inventory up and sellers cutting prices in key metros, there’s room to build wealth through real estate—if you can lock in a deal before rates potentially ease. Focus on markets with softening prices like Austin or Miami, but tread carefully and crunch the numbers.