U.S. Home Prices Fell Again in July 2025: A Market Shift Explained

U.S. home prices declined for the third consecutive month in July 2025, falling 0.1% on a seasonally adjusted basis. This marks the highest number of major metropolitan areas experiencing price drops since records began in 2012. The slowdown is driven by a fundamental shift: housing supply has rebounded to pre-pandemic levels while buyer demand has weakened due to elevated mortgage rates and economic uncertainty, creating new opportunities for patient buyers.

What Do the Latest U.S. Home Price Figures Show?

According to the Redfin Home Price Index (RHPI)—a metric that uses the repeat-sales pricing method to track changes in prices of single-family homes—the market is cooling. The RHPI recorded a 0.1% seasonally adjusted decline in July 2025, following drops in May and June. This is only the fifth time monthly declines have occurred since 2012. Year-over-year price growth has also slowed significantly to just 2.9%, the lowest annual rate in over a decade. The core issue is an imbalance between supply and demand. The number of homes for sale has increased, but the pool of active buyers has shrunk to its lowest level in over ten years, excluding the initial pandemic lockdown period.

Which Metro Areas Are Seeing the Biggest Price Changes?

The cooling trend is not uniform across the country. In July, a record 39 of the 50 most populous U.S. metropolitan areas (metros) saw month-over-month price declines. The largest decreases were concentrated in Sun Belt and previously high-flying markets:

• West Palm Beach, FL: -2.6%
• San Diego, CA: -2.2%
• Austin, TX: -1.9%

Conversely, some markets still saw gains, led by Warren, MI (1.3%), Newark, NJ (0.7%), and San Jose, CA (0.5%). On a year-over-year basis, the story is different, with New York (11.8%), Newark (9.3%), and Nassau County, NY (8.3%) leading in price growth. Meanwhile, Austin (-4.5% year-over-year), Tampa, FL (-4.2%), and Dallas (-2.6%) posted the largest annual declines.

For sellers, this environment means pricing competitively from the start is critical. For buyers, the increased inventory and higher likelihood of price reductions present a window of negotiation that was largely absent during the recent seller’s market. Based on our experience assessment, successful transactions in the current climate require a clear understanding of local market dynamics, as national trends can mask significant regional variations.