After rising steadily and by 80% over the past decade, the average U.S. home price fell in July across the nation. The declines were only 1%, more or less, but they occurred in all four general regions of the country. Moreover, in the list of housing metropolises kept by the “Wolf Street” column, 20 of the 33 showed annual price declines from July 2024 to July 2025. When a housing market bubble finally stops expanding (here, at an average price of roughly $450,000 when including both new and existing home sales), home prices usually start falling, causing the wealth of most U.S. households to decline.
Whereas in the labor market, there is a disappearing supply of immigrant workers who are in demand, in the housing market it’s the opposite: There’s now a rising supply of overpriced, unaffordable homes for which there’s no demand. The result is historically high prices and historically low sales. The problem was noted in the minutes of the July monetary policy committee of the Federal Reserve: “A few participants noted a weakening in housing demand, with increased availability of homes for sale and falling house prices.”
U.S. home ownership is at about 65%, recovered slightly from the low of 63% it reached after the 2007-08 crash, and homes are the largest share of the wealth of the great majority of households who own them. The last sustained drop in home values was in the years 2005-08, leading to the global financial crisis.
