Home value declines spread, but losses since last sale are rare
Key takeaways:
- Over the past year, more than half (53%) of homes have lost value, the highest share since 2012.
- 4.1% of homes are down from their last sale price, up from 2.4% a year ago, and 1.6% are down substantially (more than 5%) from their last sale price.
- Only 3.4% of new listings are priced below their previous sale price, with 2.0% down substantially.
National home value appreciation has flattened but that doesn’t mean that home values aren’t changing. We know that all real estate is local, but more than that, all real estate is personal. Even in “up” local markets, submarkets and individual homes can lose value. And in local “down” markets, some homes will hold their value better than others. As of October 2025, 53% of homes have lost value over the past year as measured by their Zestimate. This share has climbed from only 16% just a year ago. This is on the highest share of homes declining in value since April 2012, when the housing crash was starting to bottom out.
Loss of value over the past year has been most widespread in the West and South. Most major metros in these regions have seen half or more of their homes lose value. More homes have slid in Denver than in any other metro, 91%, followed by Austin (89%), Sacramento (88%), Phoenix and Dallas — both at 87%. All told, 49 of the 64 major metros in these regions (those in the top 100 nationally) have had most homes fall in value. In sharp contrast, only three of the 36 major metros in the Northeast and Midwest have had majority declines over the past year; Minneapolis — where 55% of home values fell —Des Moines (54%), and Scranton (52%). While the losses have largely missed the Northeast and Midwest so far, declines are spreading to more homes in all metros.
From Peak
Home value declines can be scary. For most homeowners, their house is their largest asset and the equity in the home is a major part of their long-term saving and retirement plan. Part of financial planning for many includes tracking the value of their home by regularly checking their Zestimate. Seeing that Zestimate hit a peak and then decline can be concerning. Since July of 2022, most homes have fallen from their peak value. The average drawdown of all homes is 9.1% — that hasn’t worsened substantially over the past three years. It is a larger setback than the tiny 3.5% in spring 2022, but still slightly lower than pre-pandemic rates and a far cry from the 27% average drawdown in early 2012.
It’s important to consider that the peak for most homes was fairly recent. Most peak Zestimates were hit within the past few years. But most homes were purchased well before this and for quite a bit less. That means the majority of owners are still sitting on sizable gains. Among homes with sales records in Zillow data, the median home was last purchased 8.6 years ago and has experienced a 67.2% increase in value since that sale.
Change From Last Sale Price
As concerning as tracking drawdowns can be, what really matters is the previous sale and the next sale. In September, 5.9% of homes were valued lower than the last time they sold. This share is rising quickly, up from 2.8% last year, but is still lower than the 7.9% of homes in the same position before the pandemic. A lower but meaningful share of homes are currently estimated to be valued more than 5% under their previous sale price. The share of homes down so substantially has grown from 0.8% to 1.7% over the past year. This is not a high share historically speaking, but in areas where there were an outsized number of homes sold during the pandemic-era boom, the share is much higher. In Austin, 17% of homes are estimated to be valued substantially lower than their last sale price.
But these “losses” are not realized until a homeowner sells their home. The continued low inflow of new inventory to the market indicates that sellers are not being forced to sell. Only 3.4% of new listings coming to market are priced below their last sale price, under the 4.1% share of all homes with Zestmates below previous price. While this has risen from 2.1% a year ago, the difference shows that owners are not being driven to sell their homes or list at large discounts.
In areas where substantial home value declines were more common, homes with losses were less likely to be listed. This suggests that sellers are trying to sell into strength and are otherwise able to wait for a stronger market. A rise in listing likelihood in these more distressed areas would be a sign that selling is becoming forced rather than opportunistic, which is currently not the case.
Though a cooling labor market and high prices continue to challenge household budgets, for now most homeowners are well able to weather short-term financial turbulence. Those who either bought or refinanced at historically low mortgage rates have stable, low payments and most home owners have significant equity amassed in their homes.