Real Estate Downturn: Predicted Staggering Declines in Housing Prices Across 20 Troublesome Markets by 2026
The U.S. housing market is bracing for a broad cooling and correction across many metropolitan areas, with Zillow and real estate analysts predicting the 20 worst housing markets to experience the biggest price declines by May 2026. While an exact ranked list of the top 20 worst markets is not explicitly provided, several cities are consistently cited as facing significant home price declines.
Among the cities experiencing price drops are Seattle (-2.7%), Washington, D.C. (-2.6%), Pittsburgh (-2.4%), Nashville, TN, Phoenix, AZ, Jacksonville, FL, Dallas, TX, Tampa, FL, Salt Lake City, UT, Orlando, FL, Austin, TX, Denver, CO, and Denver, CO.
These cities are seeing price drops due to a surge in housing inventory outpacing demand, sellers aggressively cutting prices, and historically high mortgage rates reducing affordability for buyers. For instance, markets like Nashville, Phoenix, Jacksonville, Dallas, and Tampa have witnessed aggressive price cuts amid increasing supply and waning buyer interest, trends expected to continue through 2025 and 2026.
Additional contributing reasons include a national trend of weakening housing market conditions, such as declining housing starts and building permits, which are nearing historic lows. Builder sentiment is also very low, reflecting concern about demand and selling conditions. These pressures cause home prices to stagnate or fall slightly, as sellers compete to attract fewer buyers by reducing prices rather than just offering incentives or upgrades.
In total, projections show over 600 metro areas across the U.S. will see home price declines by April 2026, suggesting widespread market softening. Key reasons driving declines are an excess supply versus demand imbalance in many metros, high mortgage rates limiting affordability, reducing the buyer pool size, a market correction after years of rapid price appreciation, and builder and seller responses with price cuts as demand cools.
While specific numeric decline forecasts are limited beyond the few metros mentioned (-2% to -3% ranges), these cities represent some of the most notable expected declines due to the combination of local economic conditions and national interest rate impacts.
For a precise list of the top 20 worst markets by projected declines, such data may require access to premium real estate analytic tools like Reventure or Zillow’s detailed metro forecasts. However, the above metro areas are among the worst affected based on current public data trends and expert analysis. It's important to do homework, consult with real estate professionals, and make informed decisions based on individual circumstances.
Investors and homebuyers should be aware that certain cities, such as Beeville, Alice, Pecos, Opelousas, Zapata, DeRidder, and others in Texas and Louisiana, are also at high risk of price declines, with projected drops ranging from 9.4% to 15.0%. These cities may present opportunities for those looking to invest in real estate or buy a home at a lower price point.
Renters might have more options and less pressure from rising rents in some areas, as multi-family rents are projected to increase by 1.6% in 2025, while single-family rents are expected to rise by 2.8%.
In summary, the U.S. housing market is projected to dip 1.4% nationwide, with many metros seeing significant home price declines. Homebuyers, renters, and investors should be aware of the cities at high risk of price declines and make informed decisions based on local economic conditions, housing inventory, mortgage rates, and individual circumstances.
- Real estate analysts predict that the U.S. housing market will experience price declines in over 600 metropolitan areas by April 2026, with some cities seeing drops as significant as 15.0%.
- Among the cities expected to see significant home price declines are Seattle, Washington D.C., Pittsburgh, Nashville, Phoenix, Jacksonville, Dallas, Tampa, Salt Lake City, Orlando, Austin, Denver, and Seattle.
- These declines are due to a surge in housing inventory outpacing demand, sellers aggressively cutting prices, and historically high mortgage rates reducing affordability for buyers.
- For instance, markets like Nashville, Phoenix, Jacksonville, Dallas, and Tampa have witnessed aggressive price cuts amid increasing supply and waning buyer interest.
- Investors and homebuyers may find opportunities in cities like Beeville, Alice, Pecos, Opelousas, and Zapata in Texas and Louisiana, which are also at high risk of price declines.
- Renters might benefit from more options and less pressure from rising rents in some areas, as multi-family rents are projected to increase by 1.6% in 2025, while single-family rents are expected to rise by 2.8%.
