15 Housing Markets Facing the Steepest Decline in Home Prices

Thinking about buying or selling a home? The housing market is always a hot topic, and right now, it's even more interesting. Several factors are at play, from mortgage rates to the availability of homes, and these are all impacting where prices are headed. According to the latest projections, while some markets are expected to remain stable or even increase in value, others are facing potential price declines. So, where are home values expected to drop the most?

Based on current forecasts, the 15 housing markets set for the biggest price decline over the next year are primarily concentrated in the South, with Mississippi and Texas leading the way. These markets could see significant drops in home values, presenting both challenges and opportunities for buyers and sellers. Let’s explore these markets and what the future might hold.

Why the Housing Market is Shifting

Before we get into the specific markets, it's important to understand the bigger picture. Several factors are contributing to the anticipated price declines in certain areas. The two key factors seem to be rising inventory and high-interest rates.

• Rising Housing Inventory: More homes on the market mean more options for buyers, and that naturally puts downward pressure on prices. As sellers return to the market, they may need to lower their prices to attract buyers.
• Elevated Mortgage Rates: High mortgage rates make buying a home more expensive. When borrowing money costs more, fewer people can afford to buy. This decreases demand, which can lead to price drops.
• Labor Market Concerns: Uncertainty about jobs and the overall economy can also impact the housing market. If people are worried about losing their jobs, they're less likely to make big purchases like homes. This reduced confidence further cools the market.

Zillow's latest forecast predicts a 1.4% dip in home values this year, mainly due to the increase in available homes. This forecast is in line with what they projected last month, indicating a consistent trend. While sales are expected to rise by 1.9% compared to 2024, this increase isn't enough to offset the impact of higher inventory on prices.

15 Housing Markets Facing the Steepest Decline in Home Prices

Okay, let's break down the 15 metropolitan statistical areas (MSAs) predicted to see the biggest home price drops, according to the latest data from Zillow:

Region Name	Region Type	State Name	Price Change (June 30, 2025)	Price Change (August 31, 2025)	Price Change (May 31, 2026)
Greenville, MS	msa	MS	-2.6%	-5.5%	-15%
Pecos, TX	msa	TX	-1.5%	-3.8%	-14.2%
Clarksdale, MS	msa	MS	-3.1%	-7.3%	-13.6%
Cleveland, MS	msa	MS	-2%	-5.1%	-13.4%
Bennettsville, SC	msa	SC	-3%	-6%	-12.9%
Raymondville, TX	msa	TX	-2.1%	-4.9%	-12.1%
Opelousas, LA	msa	LA	-1.9%	-4.6%	-11.6%
Morgan City, LA	msa	LA	-2.6%	-5.7%	-10.6%
Big Spring, TX	msa	TX	-0.4%	-2.2%	-10.5%
Natchez, MS	msa	LA	-2.6%	-5.3%	-10.3%
Zapata, TX	msa	TX	-1.8%	-3.5%	-10.3%
Helena, AR	msa	AR	-1%	-2.1%	-10.2%
Indianola, MS	msa	MS	-2.6%	-4.9%	-10.1%
Johnstown, PA	msa	PA	-1.6%	-4.5%	-10%
Hobbs, NM	msa	NM	-0.5%	-1.7%	-10%

Let's take a closer look at each of these areas.

Deep Dive into the Declining Housing Markets

Here’s a closer look at what might be causing the downturn in these particular regions:

1. Greenville, MS: Located in the Mississippi Delta, Greenville's economy is heavily reliant on agriculture. Fluctuations in commodity prices and agricultural yields can significantly impact the housing market. The projected 15% decline by May 2026 suggests deeper economic challenges in the area.
2. Pecos, TX: Pecos has seen rapid growth due to the energy sector, particularly oil and gas. However, this growth is volatile and directly tied to commodity prices. A 14.2% decline indicates cooling in the energy sector may be impacting housing demand.
3. Clarksdale, MS: Clarksdale, known as the “Home of the Blues,” faces similar economic challenges as other Mississippi Delta regions. A high poverty rate and limited job opportunities may be driving the projected 13.6% price decline.
4. Cleveland, MS: Like its neighboring cities in Mississippi, Cleveland's economy is also challenged. Limited economic opportunities and slow population growth result in a predicted drop of 13.4%.
5. Bennettsville, SC: Bennettsville is a smaller market facing economic headwinds related to declining manufacturing and limited diversification in employment opportunities that could be causing a 12.9% drop.
6. Raymondville, TX: Located near the Texas-Mexico border, Raymondville's economy is tied to international trade and agriculture. Economic uncertainties related to trade policies and weather-related agriculture risks could explain the 12.1% decline.
7. Opelousas, LA: Opelousas, a small city in Louisiana, faces challenges common to rural areas, including limited job growth and aging infrastructure. The 11.6% decrease reflects these underlying economic issues.
8. Morgan City, LA: Reliant on the oil and gas industry, Morgan City faces volatility with energy market fluctuations. A 10.6% drop would suggest the oil market is softening here.
9. Big Spring, TX: Another Texas city dependent on the energy industry, Big Spring's housing market is susceptible to the ups and downs of oil prices. The 10.5% decline may stem from reduced activity in the oil fields.
10. Natchez, MS: Natchez, known for its historic homes and tourism, is still a smaller market in a state with broader economic challenges. A 10.3% decline may signify deeper problems than just high-interest rates.
11. Zapata, TX: Zapata's proximity to the border makes it vulnerable to trade fluctuations and economic policies impacting cross-border activities. A 10.3% drop in housing could reflect these vulnerabilities.
12. Helena, AR: Helena faces significant economic hardships, including high unemployment and poverty rates, which have had a profound effect on the value of the housing market leading to projected losses of 10.2%.
13. Indianola, MS: Indianola, like other Mississippi Delta cities, struggles with limited economic diversification and a shrinking population. A 10.1% decline illustrates the broader economic struggles of the region.
14. Johnstown, PA: Johnstown, located in southwestern Pennsylvania, has been grappling with a shrinking population and a shift away from its historical industrial base. With a projected dip of 10% there could be opportunities for new growth in other markets.
15. Hobbs, NM: Hobbs, located in southeastern New Mexico, is part of the Permian Basin, a significant oil and gas production region. A 10% decline would imply that this is not a market where growth is expected in the near future.

What Does This Mean for You?

The potential price declines in these markets present both opportunities and risks, depending on your situation:

• For Buyers: If you're looking to buy in these areas, you might be able to negotiate a better price or find more affordable options. However, be aware that these markets may face economic challenges. Do your research!
• For Sellers: If you're selling, it's important to be realistic about pricing. You might need to lower your expectations and be prepared to wait longer to sell your home.
• For Investors: These markets could offer investment opportunities if you're willing to take on the risk. Buying low and holding for the long term could pay off if these areas experience an economic turnaround. But thorough due diligence is crucial.

Final Thoughts

While these forecasts give us a glimpse into what might happen over the next year, the real estate market is complex and can change quickly. Various factors that go into prices of real estate change more frequently than any one can predict. Staying informed, doing your own research, and consulting with real estate professionals can help you to navigate these trends and make smart decisions!