Regional Home Value Trends Show Divergence: Northeast Holds Strong While Other Markets Stall

Recent data from Zillow reveals a fascinating divergence in U.S. housing markets over the past year. While home values have risen in parts of the country, roughly half of major metropolitan areas experienced declines. This shifting landscape has created a scenario in which homebuyers are wielding more negotiating power, yet affordability challenges continue to limit the pool of those who can truly take advantage.

Rising Values in the Northeast and Midwest

In approximately 25 large metro areas, predominantly in the Northeast and Midwest, home prices have seen year-over-year growth. While demand remains strong in these regions, particularly in more affordable markets, the pace of new construction has been constrained by zoning regulations, land scarcity, and building limitations. Many cities in these regions are still struggling with inventory levels that have yet to return to pre-pandemic norms, leaving homeowners with few upgrade options.

Key metros seeing the highest annual home value growth include:

• Cleveland, OH: +4.7%
• Hartford, CT: +4.5%
• Louisville, KY: +3.9%
• Detroit, MI: +3.8%
• Buffalo, NY: +3.7%

Despite these gains, the pace of growth is modest compared to the double-digit increases observed three to four years ago, signaling a slower, more stabilized market.

Cooling Prices in the South and West

In contrast, 25 other major cities largely in the South and West saw home values decline over the past year. Cities like Tampa (-6.2%), Austin (-6%), Miami (-4.6%), Orlando (-4.3%), and Dallas (-3.9%) have experienced price corrections after years of explosive growth. These declines have partially restored affordability, giving buyers more options. In many Southern markets, builders were able to keep pace with demand, reducing upward pressure on prices and providing a wider array of housing choices.

Western coastal cities like San Francisco and San Diego, however, continue to face steep affordability hurdles, with limited new construction and high demand sustaining elevated prices.

National Perspective: Balancing Affordability and Buyer Power

The nationwide picture reflects near stagnation in home value appreciation, with the national average rising just 0.2% over the past year. While slower price growth and slightly lower mortgage rates have improved affordability in some areas, the average monthly mortgage payment remains roughly $1,907 about $995 higher than pre-pandemic levels.

“Whether it’s a good time to buy is extremely location-dependent,” says Kara Ng, Senior Economist at Zillow. “Buyers have more leverage than they’ve had in recent years, but many still can’t use it effectively due to persistent cost barriers. Where builders can meet demand, affordability is improving gradually. Supporting construction isn’t just about giving buyers negotiating power it’s about giving them real opportunities to act on it.”

Inventory Trends and Seller Adjustments

Markets with high inventory growth are experiencing the largest price adjustments. Between 2020 and 2024, metro areas with the most building permits, particularly in the South, saw significant price corrections. By contrast, regions with strict land-use restrictions or slow construction have experienced more stable prices, keeping affordability pressures in place.

Nationally, there is still an estimated housing deficit of 4.7 million units, with demand particularly strong at lower price points. Sellers have increasingly resorted to price reductions to attract buyers: in July, 27.4% of listings were discounted, marking the highest share since Zillow began tracking this statistic in 2018. Price cuts are more common in the South and Mountain regions, while Northeast and West Coast markets remain more favorable to sellers.

The overall market shows declining buyer competition. Zillow’s Market Heat Index indicates that in July, 27 major metros were either balanced or slightly favoring buyers an increase from previous months and the lowest competition level nationally for any July since 2018.

Sales Speed and Listing Trends

Homes are also taking longer to sell. Listings went under contract in a median of 24 days, one day longer than the pre-pandemic average for July and six days slower than the previous year. Overall, the median time a listing remains on the market is now 60 days, four days longer than pre-pandemic averages. These trends highlight the growing divide between attractive listings that sell quickly and less appealing ones that linger.

Digital tools are becoming increasingly important for buyers and sellers. Interactive features like 3D tours, virtual floor plans, and high-quality photography are critical for sellers to stand out and capture buyers’ attention before in-person visits.

Broader Takeaways

• Home values are uneven nationwide: Rising in parts of the Northeast and Midwest, declining in the South and West.
• Affordability pressures persist: Even with slowing price growth, monthly mortgage payments remain historically high.
• Construction drives local market dynamics: Areas with more robust homebuilding have seen lower price growth and improved affordability.
• Buyer leverage vs. affordability: Buyers have negotiating power but are constrained by high prices in many markets.
• Digital-first home shopping: Listings need to leverage online tools to attract today’s consumers.

In summary, the housing market is evolving into a more nuanced landscape. While buyers may feel empowered in theory, their ability to act depends heavily on local market conditions, affordability constraints, and the availability of new construction. Sellers, meanwhile, must adapt to a market that rewards visually appealing, well-marketed properties while navigating a more selective pool of buyers.

This year, the U.S. housing market reflects a delicate balance: moderate national stability paired with stark regional divergence, shaping opportunities and challenges for buyers, sellers, and policymakers alike.