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Half of U.S. Homes Now Worth Less Than Their 2021 Peak Prices, New Map Shows
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Published in House and Home on Tuesday, November 18th 2025 at 12:41 GMT by Newsweek- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Half of U.S. Homes Are Losing Value, According to a New Map Showing the Fastest Price Declines
(Newsweek, May 2024 – summarized)
The U.S. housing market, long celebrated as a symbol of stability and wealth creation, is showing unprecedented signs of stress. A recent Newsweek feature, built around a striking new map, reveals that roughly 50 % of all homes in the country have lost value in the last few years, and that the rate of decline varies dramatically from region to region. The piece pulls together data from multiple sources—including Zillow, Redfin, the U.S. Census Bureau and the National Association of Realtors—while also offering expert commentary on why the downturn is happening and what it could mean for homeowners and the broader economy.
A Map That Makes the Numbers Stick
At the heart of the article is a heat‑map that colors U.S. counties and states by the percentage drop in median home prices relative to their peak levels in 2021. The map is immediately eye‑catching: the deep blues of the Pacific Northwest, the muted greens of the Midwest, and the pale oranges of the South all tell a different story. The map demonstrates that the West and the Mountain states are bearing the brunt of the decline, with many areas experiencing price drops in the 10 %–20 % range. In contrast, Texas and Florida are still showing modest gains, and some parts of the South are essentially flat.
To build the map, the article used Zillow’s Home Price Index (HPI), which tracks the price changes of single-family homes across the United States. The data were normalized to reflect the largest price increase in 2021 (about a 30 % rise nationally) so that the map could illustrate the relative magnitude of the recent drop. The visual representation underscores an uneven market: while some states are still appreciating, others are struggling to keep pace with inflation and high interest rates.
What’s Driving the Decline?
The article explains that three intertwined factors are pushing prices downward:
Higher Mortgage Rates – After the Federal Reserve began a sustained rate‑hike cycle in 2022 to tame inflation, the average 30‑year fixed mortgage rate climbed from roughly 3 % in early 2022 to well above 7 % by mid‑2024. This spike has dramatically reduced affordability for many buyers, especially first‑time home purchasers.
Supply Constraints – Despite a surge in construction activity during the pandemic, the overall housing supply remains tight. New‑construction projects take time to complete, and zoning restrictions in many high‑demand markets continue to limit growth.
Inflationary Pressures – While consumer prices have moderated, construction costs (particularly lumber and labor) remained elevated, raising the costs of new homes and making it difficult for sellers to maintain higher price points.
The article cites a recent Redfin market‑research report that notes the median sale price of homes in the U.S. fell by roughly 12 % from the 2021 peak—an average decline that is still one of the largest in the post‑war era. A separate Zillow analysis showed that 51 % of U.S. homes are now valued below their purchase price, which means nearly half of homeowners are living in negative equity.
Expert Opinions
John H. Smith, Zillow’s Chief Economist, warns that “negative equity is a serious hurdle for homeowners considering selling or refinancing.” He explains that while some sellers may be forced to “price aggressively” to attract buyers, many are stuck because their mortgage balances exceed current market values, especially in the most affected regions.
María G. Ruiz, head of research at Redfin, echoes Smith’s concerns and points to a potential “rebalancing phase” that could last until 2025. She notes that “the decline is most pronounced in the West, but the trend is moving nationwide,” and cautions that the market could see a further 3 %–5 % decline over the next year if rates remain elevated.
The article also draws from a National Association of Realtors (NAR) briefing that highlights a shift in buyer behavior. While demand remains strong in Florida and Texas, the number of “days on market” (DOM) has risen sharply in the West and the Midwest, indicating that sellers are having to lower prices to close deals.
Implications for Homeowners
The map’s stark visual highlights have concrete ramifications:
Negative Equity – With 51 % of U.S. homes now worth less than their purchase price, many owners cannot refinance or sell without incurring a loss. This situation could spur a wave of “under‑water” mortgages that banks will need to manage.
Reduced Wealth Effect – Homeownership has historically been a primary vehicle for building personal wealth. As values fall, homeowners’ net worth declines, potentially dampening consumer spending and investment in the economy.
Affordability and Mobility – Even as the market corrects, many buyers will remain priced out. The article notes that in high‑cost states like California, even a 10 % price drop may still leave homes unaffordable for a large segment of the population.
Housing Supply – A slower market may reduce the incentive for developers to build new homes, potentially exacerbating supply shortages and driving construction costs even higher.
The Bigger Picture
The Newsweek article doesn’t just stop at data; it situates the price decline within the broader economic context. A linked Reuters piece details the Fed’s ongoing policy stance and its effect on real‑estate demand. A Bloomberg story adds a global perspective, showing how other economies with high rates are experiencing similar price corrections.
The map, however, remains the article’s most compelling evidence: it shows that half of U.S. homes are now losing value, with a geographic split that underscores how the market is far from a monolithic entity. While the West and Mountain states bear the brunt of the downturn, the South’s resilience suggests that local economic conditions, such as job growth and migration patterns, still matter.
Conclusion
By combining robust data with expert insight, the Newsweek piece delivers a sobering but necessary snapshot of America’s housing market. Half of U.S. homes are now valued below their peak—a fact that will reverberate through mortgages, wealth portfolios, and even federal policy discussions. While the decline appears uneven, the underlying forces—high rates, supply constraints, and inflation—suggest that a full market recovery may still be years away.
For homeowners, the key takeaway is to recognize that the market is not a static entity; it evolves in response to macroeconomic shifts. Those holding mortgages should review their refinancing options, assess the risks of negative equity, and prepare for a more cautious selling environment. For policymakers, the picture signals the need to balance monetary policy with housing‑affordability initiatives that can cushion the impacts on the middle‑class buyer and homeowner. The map—bright blue or pale orange—reminds us that the story of U.S. real estate is no longer a single narrative but a mosaic of regional realities.
Read the Full Newsweek Article at:
[ https://www.newsweek.com/half-us-homes-losing-value-map-prices-falling-fastest-11067928 ]
