The days of bidding wars are ending -- and many metro areas are seeing steep drops in home prices.
The red-hot U.S. housing market, once defined by bidding wars and buyers stretching budgets, is finally cooling after years of surging prices. In many regions, home values are slipping and inventories of unsold properties have swelled to levels not seen since the 2008 financial crisis.
The combination of mortgage rates hovering around 7% and economic uncertainty tied to tariffs has created a host of reasons for hesitation. Sellers are making concessions, and buyers hold the cards. Even luxury buyers, who are typically less sensitive to borrowing costs, are pulling back.
What's emerged is less the frenzied seller's market of recent years and more a traditional housing market where negotiation is back on the table. Almost half of sellers nationwide are already offering concessions, according to Redfin.
Citi Research has warned that housing activity looks set to contract, calling residential investment "the most interest rate sensitive sector in the economy." Federal Housing Finance Agency Director William Pulte has echoed those concerns, publicly urging the Federal Reserve to lower interest rates.
Once-booming Texas and Florida are at the center of the change, with metro areas in both states seeing some of the steepest year-over-year declines in home values. Even beyond those states, metros like Phoenix, San Francisco, and Atlanta are seeing values retreat.
Using Zillow data, we've compiled a list of the markets that are feeling the sting of high-interest rates and a slowing economy the most. Continue reading to see the 10 metro areas seeing the biggest depreciation in home prices.
Jackie Snow and Niamh Rowe contributed reporting to this article.