Worried About Falling Home Prices? Here’s What the Data Actually Shows
If you’ve seen recent headlines about home prices “dropping,” you’re not alone in feeling concerned. It’s natural to wonder whether your home is losing value especially after years of rapid growth.
But here’s the reality: while a handful of local markets have seen slight declines, home prices are not falling across the country. In fact, most areas are still seeing values rise.
The problem isn’t the data, it's how the data is being framed.
What’s Really Happening With Home Prices
According to year-over-year data from the Federal Housing Finance Agency (FHFA), the majority of states are still experiencing price growth. That means most homeowners across the country are seeing their property values increase, not decline.
The gains aren’t as dramatic as they were during the pandemic boom, but that’s not a bad thing. A slower, steadier pace of appreciation is actually healthier for the market long term.
Nationally, the National Association of Realtors reports that home prices are up 2.1% compared to last year. That may not grab headlines but it does tell an important story: values are still trending upward overall.
So why all the noise about falling prices?
The Headlines Are Focusing on the Exceptions
Yes, there are a few states where prices have dipped slightly over the past year. But those declines are small generally ranging from just 0.1% to around 2% — and they’re happening in very specific areas.
These are typically markets that saw dramatic price increases during the pandemic. When prices rise too quickly, some leveling off is expected. What we’re seeing now in those areas isn’t a crash, it's a correction.
That’s an important distinction.
A correction brings the market back to a more balanced pace. A crash implies widespread loss of value. And that’s simply not what the data shows.
Most Homeowners Are Still Far Ahead
Here’s another key point that often gets overlooked: even in areas where prices have softened slightly, most homeowners are still sitting on significant gains.
Data from Zillow helps put this into perspective:
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Only about 4% of homes in the U.S. are worth less than their purchase price
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Roughly 96% of homeowners still have positive equity
When you zoom out and look at the bigger picture, the reason becomes clear. Over the past five years alone, national home values have risen by nearly 49%. Nearly every market in the country experienced double-digit growth during that time.
That kind of appreciation creates a strong cushion. So even in areas seeing small short-term dips, homeowners are still well ahead overall.
What This Means for You
If you’re hearing talk of falling prices and wondering what it means for your home, the answer depends on your local market, not national headlines.
Some areas are adjusting after rapid growth. Others are continuing to rise steadily. But in most cases, homeowners are still in a very strong equity position.
A slight dip does not mean your home is losing long-term value. It means the market is normalizing after an unusually fast run-up.
The Bottom Line
Despite what the headlines suggest, home prices are not collapsing. Most markets are still seeing growth, and the vast majority of homeowners are sitting on substantial equity.
If you want to understand what’s actually happening in your neighborhood and how it affects your home’s value, a local real estate expert can help break down the numbers and give you clarity.
Because when it comes to real estate, context matters more than headlines.
