H
ome prices are now falling in seven major US metros, with San Diego, Miami, and Phoenix joining the list. According to the S&P CoreLogic Case-Shiller Index, these cities saw annual declines in sales prices for single-family homes in June. This brings the total number of metros experiencing price drops to seven, including Dallas, Denver, San Francisco, and Tampa.
Nationally, home values rose 1.9% in June compared to a year ago, but this growth was largely driven by gains in the Northeast and Midwest. The South and West saw prices fall, with Tampa recording the largest decline at 2.4%. Realtor.com Senior Economist Anthony Smith attributes the muted national growth to affordability constraints, elevated supply, and uneven regional demand.
Regional price trends are heavily influenced by inventory composition, with high-supply markets like Austin and Jacksonville experiencing increased competition from builders offering incentives and price cuts. In contrast, inventory in the Midwest and Northeast remains tighter, supporting demand and limiting new construction.
The downturn in home values marks a reversal for San Diego's housing market, which experienced explosive price growth in recent years. Home prices there rose 66% between January 2020 and January 2025, but may have outpaced local incomes. Now, wages are beginning to catch up with home prices, allowing them to fall back down to earth.
As of June, the Consumer Price Index measure of inflation climbed 2.7%, outpacing the 1.9% gain in national home prices. This marks a significant shift from the pandemic era, when home values were climbing at double-digit annual rates that far exceeded inflation. Total home equity for owner-occupied homes declined by $250 billion to $34.5 trillion in the first quarter of the year.
For homebuyers, this means wages are now rising faster than home prices, with average hourly earnings for private employees increasing 3.8% over the past 12 months. Looking ahead, experts say this housing cycle's maturation may be settling around inflation-parity growth rather than speculative excess.
