US Home Prices Stagnate: Which metros are sliding fastest and what buyers should do now

US housing cools: annual home price growth slows to 0.9%

If you follow real estate USA trends, the pause that many buyers hoped for has arrived in the data. Annual home price growth slowed to 0.9% in December 2025, according to a new U.S. home price insights report from data firm Cotality. That rate is one of the softest since the post‑Great Recession recovery and, for many metros, the headline number masks steep local declines.

This is not just a seasonal wobble. The HPI results point to a broader correction in markets that boomed during the pandemic, and the weakness is concentrated in the South and West. In this article we map where values are falling fastest, explain why, and offer practical guidance for buyers, sellers and investors who are reassessing plans in the wake of a market that is moving from a red‑hot sellers’ market toward greater balance.

Where prices are falling fastest: the Cotality HPI hot list (cold markets)

Cotality's Home Price Index (HPI) flags metros at greater risk of further declines by analyzing multiple market segments and 45 years of home price trends. The report highlights concentrated weakness in Florida and Texas and unexpected pullbacks in expensive coastal markets.

Key facts from the report:

• Annual US home price growth: 0.9% (December 2025).
• Top metros with the sharpest HPI declines: Kahului‑Wailuku, HI; Victoria, TX; Wichita Falls, TX; Napa, CA; Naples, FL; Punta Gorda, FL; Cape Coral, FL; North Port, FL; Rome, GA; Sebastian, FL.
• Largest equity percentage drop: Punta Gorda, FL, at -7.97%, equivalent to a median $26,624 decline in value.

Selected metro figures cited by Cotality and Realtor.com:

• Kahului‑Wailuku, HI — HPI drop: 8%; median list price $1,049,500 (down from $1.42M in Aug 2023).
• Victoria, TX — HPI drop: 7.4%; median $276,100.
• Wichita Falls, TX — HPI drop: 7.2%; median $199,575.
• Napa, CA — HPI drop: 7.1%; median $1,304,500 (down from $1.79M in June 2023).
• Naples, FL — HPI drop: 6.8%; median $729,725.
• Punta Gorda, FL — HPI drop: 6.2%; median $384,750.
• Cape Coral, FL — HPI drop: 6.2%; median $399,949.
• North Port, FL — HPI drop: 5.9%; median $479,900.
• Rome, GA — HPI drop: 5.2%; median $296,950.
• Sebastian, FL — HPI drop: 5.2%; median $442,725.

These numbers show both volume and luxury markets are adjusting. High‑end areas like Kahului‑Wailuku and Napa have seen meaningful corrections in median list prices and a growing share of listings with price reductions.

Why values are falling: inventory, migration and insurance costs

Cotality and local advisers identify three main drivers of the decline.

1. Higher inventory

• The record shortages that fueled bidding wars during the pandemic have eased in many markets. Where inventory climbs, sellers lose unilateral leverage and price reductions become more common. Several metros in Florida and Texas are showing measurable increases in listings and slower sale velocity.

2. Slower in‑migration to formerly fast‑growing metros

• During the pandemic, historically low mortgage rates and a desire for more living space accelerated moves into markets in Florida, Texas and parts of the Mountain West. Those flows now have slowed. Less demand from new arrivals reduces upward pressure on values.

3. Rising home insurance costs in fire‑prone areas

• Cotality's principal economist Thom Malone points to insurance as a key factor in high‑priced coastal markets. In places hit by wildfire or other catastrophic risk, rapidly rising insurance premiums increase the buyer’s ongoing cost of ownership. Sellers in those metros must compensate buyers with lower sale prices.

I agree with that diagnosis. When a buyer’s recurring cost equation includes a sudden jump in insurance, the market re‑prices quickly. You can see that logic in the data for Kahului‑Wailuku and Napa, where double‑digit median list price falls from 2023 levels have accompanied a rise in insurance expenditures.

Florida and Texas: correction concentrated, but uneven

Florida accounts for half of the metros ranked highest on Cotality’s risk list. That concentration is notable.

• Florida metros occupy the top five spots for highest risk of continuing declines: Cape Coral, Lakeland, North Port, Palm Bay and West Palm Beach.
• Florida listings with price reductions are appearing across price tiers — from North Port’s mid‑market homes to Naples’ luxury stock.

Why the Sunshine State is special in this correction:

• Overbuilt inventory in some coastal and suburban submarkets. Developers and sellers who rushed to supply more homes during the boom now face slower absorption.
• Shift in buyer flows. The earlier surge of relocation to Florida has eased, leaving many sellers who priced for peak demand with mismatched expectations.

Texas shows a mixed picture. Two metros — Victoria and Wichita Falls — rank in the top three in HPI decline. That may surprise investors who have viewed Texas as a steady growth alternative. But local conditions have changed:

• Recent price increases tightened affordability, and some buyers began to question property tax and commuting cost tradeoffs.
• Anecdotal reports from investors and agents note longer commutes and higher property taxes narrowing the delta that previously made Texas attractive versus California.

My view is that the Texas correction is more surgical than systemic. The state still has job growth in major metros, but smaller, pandemic‑era boom towns and exurban pockets are where price risk concentrates.

High‑end markets: insurance and demand shifts are key

Kahului‑Wailuku, HI and Napa, CA are instructive because they show why even wealthy markets can see sharp declines.

• In Kahului‑Wailuku, the median list price dropped from $1.42 million in Aug 2023 to $1,049,500; 10% of listings saw price cuts in January. In Napa, 11.6% of listings had reductions in the same month.
• Malone links these trends to skyrocketing home insurance costs following the 2023 fires.