The housing markets with the sharpest price declines

Home price growth has slowed to  0.9% in December 2025, but many markets are seeing only a decline.Annual home price growth of less than 1% is one of the softest rates since the post-Great Recession recovery, according to a new U.S.home price insights report from data research firm Cotality.“We are seeing a significant departure from the rapid surges of recent years; while the upward pressure on prices remains, the momentum has moderated enough to suggest that the market is finally becoming more navigable for prospective buyers,” Cotality’s chief economist, Selma Hepp, said in the report.The South and the West are getting hit the worst.

Here, negative price declines are the norm. Florida, Texas, Colorado, Washington, DC, Hawaii, Arizona, Utah, Oregon, and California have seen the steepest declines in Cotality’s Home Price Index (HPI), which predicts the risk of metros in a downturn by analyzing multiple market segments and 45 years of home price trends using proprietary statistical models.The coolest markets with the sharpest HPI decline are Kahului–Wailuku, HI; Victoria, TX; Wichita Falls, TX; Napa, CA; Naples, FL; Punta Gorda, FL; Cape Coral, FL; North Port, FL; Rome, GA; and Sebastian, FL.Punta Gorda has also seen the biggest equity percentage drop at -7.97%, with a median $26,624 plunge in value. Much of it is attributed to higher inventory levels and slowing in-migration in markets that previously saw rapid expansion, says the report.During the COVID-19 pandemic times, with mortgage rates at historic lows, people in urban areas rushed into many of these markets now approaching or in a downturn—especially Florida and Texas—as they sought more space and fewer restrictions, pushing prices up to unsustainable levels.Those markets are now seeing a hard correction, especially in Florida.The Sunshine State takes half the spots on the list.Cotality calls the declines a “return to a long‑anticipated normalization dr...