Is the Housing Market Crashing? 1 in 3 U.S. Cities See Price Drops | July 2025
- Sarah Breck
- Jul 19
- 3 min read
Updated: Jul 27
By Sarah Breck — Boise real estate agent helping buyers, sellers, and relocators make confident moves with strategy, savvy, and a human touch.
The U.S. housing market is cooling off—fast. According to a new report from CNBC’s Diana Olick, nearly one-third of the 100 largest U.S. cities are now seeing home price declines of at least 1% from their recent highs. Combine that with rising inventory and stubbornly high mortgage rates, and it’s no wonder people are asking the big question:
👉 Is the housing market crashing?
Let’s break down what’s really happening—and what it means if you're thinking about buying or selling a home in 2025.
📉 Home Prices Are Dropping in Key Markets
Data from ICE Mortgage Technology shows that annual home price growth in June slowed to 1.3%, down from 1.6% in May. That’s the slowest growth rate in two years.
While some areas are still seeing appreciation, many markets are now going the opposite direction. Cities like Cape Coral, FL (down 9%), Austin, TX, and Tampa, FL are leading the decline. In fact, 7 of the 10 biggest markets in California are now seeing home values fall.
If you're in the South or West, the price drop trend is becoming especially pronounced.
📊 Inventory Is Up 29% Year-Over-Year
Another key factor cooling the market? Rising inventory.Compared to last year, housing inventory is up 29% in June, giving buyers more options and removing some of the pressure that fueled bidding wars over the past few years.
However, that growth is starting to slow. Spring saw a surge in new listings, but summer appears more cautious—likely because many homeowners don’t want to let go of their low mortgage rates.
💸 Mortgage Rates Are Still High
The 30-year fixed mortgage rate has remained in the high 6% range for most of 2025—more than double what buyers enjoyed in 2020 and 2021.
This has created a standoff:
Buyers are struggling with affordability
Sellers are reluctant to list, not wanting to trade their 3% rate for a 6.8% one
According to Andy Walden of ICE, "Increasing inventory levels are helping to make homes more affordable, but prices are falling in an increasing number of markets, and homes are taking longer to sell."
🧭 Where Prices Are Still Rising
Not every region is dropping.
In the Northeast and Midwest, home prices are still climbing. These areas continue to see strong demand and relatively tight supply, which is keeping competition (and prices) afloat—at least for now.
This highlights the importance of local market dynamics. National headlines can paint a broad picture, but real estate is always hyper-local.
🏠 So… Is the Housing Market Crashing?
Here’s the straight answer:No, the housing market isn’t crashing—but it is correcting.
The question “is the housing market crashing?” reflects growing anxiety as prices fall in more U.S. cities. But what we’re seeing now is more of a normalization than a collapse. After years of skyrocketing values and ultra-low rates, the market is finally catching its breath.
This correction may present opportunities for buyers who were previously priced out, and for sellers who are ready to price competitively and work with market realities.
🔎 What This Means for Buyers and Sellers in Boise
If you're here in Boise, Idaho, you're probably wondering how this applies to our market. While we’re not seeing Cape Coral-level declines, Boise is part of the broader Western trend, where price appreciation has slowed and listings are sitting a bit longer.
🎯 If you’re a buyer, you may finally have room to negotiate and explore options.💡 If you’re a seller, strategic pricing, staging, and marketing will be more important than ever.
📬 Want Help Navigating This Market?
Whether you're buying, selling, or just trying to figure out your next step, I offer free local strategy sessions for anyone in the Treasure Valley.
About Sarah – With over 16 years of entrepreneurial experience, Sarah blends grace, grit, and expert guidance to create a real estate experience that’s as strategic as it is personal. Passionate about empowering her clients—especially first-time buyers and women—she’s dedicated to turning complex market moves into confident, seamless transitions in Boise and the Treasure Valley.
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