Homebuyers

Home Prices Are Slipping. For Buyers, That Might Be the Best News All Year

Good news homebuyers, prices may be coming down a little.

Zillow’s latest forecast anticipates U.S. home values to fall 1.4% in 2025. That’s a modest dip from sky-high pandemic-era price gains and far from the big declines seen during the Great Recession. But it’s good for homebuyers, many of whom have been struggling with affordability.

While the updated forecast is slightly less than Zillow’s earlier prediction of a 1.9% drop, it still marks a clear turn away from the higher price growth that has defined recent years. Some areas of the country, including parts of Texas and Florida, have experienced even steeper declines.

That cooling may sting a little for sellers who had hoped to be able to name their price. But many sellers are also would-be buyers. What they lose on one side might be gained on the other, in the form of less competition and more power to negotiate.

The housing market may be loosening up

The typical home was listed at $409,933, according to Zillow’s May 2025 data, up just 2.2% from a year ago. On paper, that’s still growth.

But when you factor in inflation, real home values have slipped—and for the first time in years, buyers may actually be gaining ground.

“Recent declines in home prices are simply the natural occurrence of prices returning to their long-term pricing trend,” said finance professor Ken Johnson, who runs the real estate program at the University of Mississippi.

Johnson emphasized the current environment is more of a normalization than a red flag.

“Housing prices follow a trend, sometimes prices are above this trend—sometimes prices are below this trend,” Johnson continued. “The recent declines in home prices are almost certainly prices returning to their long-term pricing trend and not the signal to the start of another housing crash.”

More homes are going up for sale

Buyers have more to look forward to than just falling prices. There are also more homes hitting the market. That’s a big change after years of shortages.

Zillow’s report reveals that 1.14 million homes were on the market this spring, a 19% increase over the same period last year. Buyers are now gaining more leverage as those additional homes go up for sale.  

Nearly one in four listings received a price cut in March—the highest for that month since Zillow began tracking the data.

The Sun Belt’s subtle housing reset

Some of the biggest reversals in prices are happening in the South and West—namely in markets like Tampa, Fla.; Austin, Texas; Phoenix, Ariz.; and Las Vegas, Nev.

These were the metropolitan areas that saw meteoric price growth during the pandemic.

However, today they’re leading the slowdown. Nearly one-third of listings in Phoenix and Tampa saw price reductions—the highest among major U.S. markets, according to Realtor.com’s May’s Monthly Housing Market Trends Report.

“Now’s a good time to start looking [for a home], but be strategic about it,” said Sebastian Hovsepian, a real estate agent at the nationwide NEXT Brokerage. “Get pre-approved so you know your numbers, and don’t be afraid to negotiate.”