The U.S. housing market has been so hot for so long that it’s easy to forget it can’t stay that way forever. At some point, home prices will have to stabilize or head lower — at least according to the normal economic rules.
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In fact, some cities have already shown signs of weakness. Among those that have seen a decline in median home prices over the past year include three Texas cities — Austin, Dallas and San Antonio – as well as New Orleans, Tampa and Jacksonville, Florida, according to Fast Company . These markets could see prices continue to dip in 2025.
It’s harder to forecast what might happen a few years down the road because so many variables are involved. An analysis from U.S. News & World Report predicted that through 2029, home prices will “rise more gradually” at just above the overall inflation rate. But that scenario probably won’t play out the same way everywhere. Some cities are especially vulnerable to a major housing slowdown for reasons ranging from population declines and an oversupply of homes to negative economic trends.