A major warning sign is flashing in the U.S. housing market: More than half of American homes have lost value over the past year, according to new data from Zillow.

As of October 2025, 53% of homes saw their value decline based on their Zestimate, a sharp jump from just 16% a year earlier. It’s the highest share of homes losing value since April 2012.

Zillow found the downturn has been most widespread in the West and South, where many of the nation’s most overheated markets are now cooling the fastest.

Denver experienced the broadest declines of any large metro, with 91% of homes dropping in value. Austin followed at 89%, Sacramento at 88% and both Phoenix and Dallas at 87%.

Zillow said the trend reflects affordability pressures, high mortgage rates and weakening demand across large s

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