Rising mortgage rates, increasing inventory, and shifting economic conditions are expected to drive home prices down in several U.S. cities in 2025. Once-booming housing markets may experience corrections as demand slows and affordability concerns grow. For buyers, this could mean new opportunities, while sellers may face tougher competition. Here are ten cities where experts predict home prices will decline in the coming year.

1. Austin, Texas

Once one of the hottest housing markets in the country, Austin has seen a slowdown as rising mortgage rates and affordability concerns weigh on buyers. The city experienced rapid price increases during the pandemic, fueled by an influx of remote workers and tech companies. However, as demand cools and inventory rises, home prices are expected to correct. Additionally, new construction projects have added more housing options, further easing competition. While Austin remains an attractive destination, sellers may need to adjust their expectations in 2025 as prices continue to soften.

2. Boise, Idaho

Boise saw an unprecedented real estate boom in recent years, with home prices skyrocketing as buyers from California and other expensive states relocated for affordability and a better quality of life. However, this rapid appreciation is now leading to a market correction. Many buyers are priced out, and demand has slowed as higher interest rates make mortgages less accessible. With an increase in available listings and fewer bidding wars, home values are expected to decline in 2025, making it a better market for buyers looking for deals.

3. Phoenix, Arizona

Phoenix became a hotspot for migration during the pandemic, driving home prices to record highs. Investors and out-of-state buyers flooded the market, causing bidding wars and pushing prices beyond sustainable levels. However, with demand slowing and mortgage rates remaining high, the market is experiencing a cooldown. Rising inventory and a decrease in investor activity are leading to price drops, especially in suburban areas. While Phoenix remains a desirable place to live, 2025 is likely to see continued price corrections as the market stabilizes.

4. Las Vegas, Nevada

Las Vegas was another market that surged in recent years due to increased migration and investment activity. However, the city’s housing market is particularly sensitive to economic shifts, and as inflation and mortgage rates impact affordability, home sales have slowed. The hospitality-driven economy also faces challenges, which could further dampen demand. With new construction adding supply and fewer out-of-state buyers competing for homes, price declines are expected in 2025, giving local buyers more negotiating power.

5. Salt Lake City, Utah

Salt Lake City has experienced significant price growth in recent years, but affordability concerns and an oversupply of new homes are leading to a potential decline in 2025. The city’s strong job market and high quality of life have drawn buyers from more expensive states, but rising interest rates are now limiting purchasing power. Additionally, new housing developments in the suburbs are increasing competition, giving buyers more choices and forcing sellers to adjust prices. As the market stabilizes, buyers may have the upper hand in negotiations.

6. Nashville, Tennessee

Nashville’s housing market experienced a major boom over the past few years, driven by job growth, a thriving music and entertainment industry, and an influx of new residents. However, home prices surged at an unsustainable rate, and affordability has become a significant concern. Rising mortgage rates have slowed buyer demand, while new housing developments have increased supply. As competition cools, price reductions are becoming more common, and experts predict a continued decline in 2025 as the market stabilizes.

7. Raleigh, North Carolina

Raleigh has been a strong housing market, benefiting from a robust tech sector, major universities, and a desirable quality of life. However, after years of soaring home prices, the market is showing signs of a slowdown. Higher interest rates have reduced affordability, and with more homes available on the market, sellers are cutting prices to attract buyers. The market correction is expected to continue into 2025, particularly in higher-priced segments, making it a more favorable environment for homebuyers.

8. Sacramento, California

Sacramento became a popular alternative for Bay Area residents seeking more affordable housing during the pandemic, leading to a sharp rise in home prices. However, as interest rates have increased and remote work trends shift, demand has weakened. Many buyers who moved to Sacramento are reconsidering, and some are even returning to major metro areas. With a growing inventory of unsold homes and fewer bidding wars, Sacramento’s home prices are expected to drop in 2025, especially in higher-end neighborhoods.

9. Denver, Colorado

Denver’s housing market saw explosive growth in recent years, driven by strong job growth and high demand from out-of-state buyers. However, the city’s affordability has taken a hit, with home prices reaching levels that many local buyers can no longer sustain. Rising interest rates and an increase in housing inventory have slowed sales, leading to price reductions across the market. Experts predict a continued cooling in 2025 as Denver transitions from a seller’s market to one where buyers have more negotiating power.

10. Tampa, Florida

Tampa has been one of Florida’s hottest real estate markets, with prices surging due to strong migration trends and investor activity. However, as interest rates remain elevated and insurance costs continue to rise, affordability is becoming a major issue. The demand from out-of-state buyers has started to wane, and the market is adjusting. More homes are sitting on the market longer, and price reductions are increasing. In 2025, experts anticipate further declines as Tampa’s market finds a more sustainable balance between supply and demand.

This article was created with the assistance of AI but thoroughly edited by a human being.