Trouble is brewing in more than a dozen major metropolitan areas, where prices could drop by 10% to 20% due to a range of micro and macroeconomic factors.
NewHomeSource examined active listings, affordability, community count, employment growth, homeowner insurance burden, net migration, and price appreciation to determine that these are the markets that are at moderate risk of falling prices for new homes.
These moderate markets are navigating a more nuanced risk landscape. Some have solid underlying fundamentals but are beginning to show signs of softening in select areas. Others appear stable on the surface but are facing challenges in demand, affordability, or migration patterns
Atlanta: A bifurcated market with a notable investor footprint and more developable land.
Baltimore: High public-sector employment, facing rising macro risks.
Dallas: Erosion of affordability in both new and existing home markets.
Detroit: Steep affordability drops, but new home supply growth has remained relatively low.
Houston: Insurance costs have grown as a share of price.
Las Vegas: Sluggish employment and inventory growth keep it on the watchlist.
Nashville: Affordability has softened, and net migration has been comparatively slower.
Philadelphia: Highest for new home price growth, but communities and listings are down since 2019.
Portland: Weaker job market and slowing migration.
Provo: Moderate overall pricing but still monitoring affordability declines.
Riverside: Supply controlled more than in the past but affordability below the national average.
San Antonio: Watching listings and could be approaching the limit on job-supported home price growth.
San Francisco: Reputational concerns, along with softening employment conditions and tech reliance.
Seattle: Tesch sector vulnerability and watching shifting employment dynamics.
Washington, DC: Risk of government job cuts and high YOY listings growth.
What this means for buyers: If you’re shopping in one of these moderate-risk markets, the potential for a 10–20% price drop could work in your favor, but timing is key. Waiting could mean more negotiating power and a better deal, especially if rising inventory or affordability pressures push sellers to adjust.
On the other hand, mortgage rates, insurance costs, and local job trends can change quickly, which may offset any savings from lower prices. Buyers should monitor local data closely, get pre-approved to move fast if the right home appears, and factor in long-term stability rather than chasing the lowest possible price.
