Are Home Prices Going Down? Your Paycheck Is Finally Winning
For three years the question was rhetorical. Home prices only went up, and they went up faster than your raise, and the gap between the two was the reason "just save a little longer" stopped being a plan. So here is the number that quietly flipped: over the latest year of data, the typical American's paycheck grew faster than the typical home's price.
We ran the wage figure and the home-value figure side by side for every county we track. In roughly 7 out of 10 of them, wages won — 692 of the 992 counties with at least 50,000 people. It is the first time in this dataset that the race hasn't been a blowout in housing's favor. And the place where paychecks won by the most is the exact place you'd least expect.
What actually changed
Nothing about this says homes got cheap. It says the direction of the squeeze reversed. From 2020 to 2022, home values ran away at double-digit annual rates while wages crept along at three-and-change. That's the stretch that broke the math for a lot of would-be buyers.
Then rates happened. With 30-year mortgages parked around 6.6% through 2024 and into 2025 — more than double the pandemic-era lows near 2.7% (Freddie Mac) — demand cooled, inventory rebuilt, and price growth stalled out. National home prices rose just 1.8% in the year through late 2025, the slowest pace since 2012 (FHFA). Meanwhile wages kept climbing at roughly 4% (BLS Employment Cost Index). Same two lines, crossed for the first time in years. It's the mirror image of the cost-of-living math we've written about before — except this time the relief comes to you instead of requiring a move.
The relief is loudest where the boom was loudest
Here's the twist. The counties where paychecks beat prices by the widest margin aren't sleepy backwaters that never heated up. They're the pandemic darlings — the Sun Belt metros that led the country in price gains from 2020 to 2022 and priced locals out in the process. In those markets home values didn't just slow; they fell, while local wages rose.
| County | Wage growth | Home-price change | Typical home |
|---|---|---|---|
| Travis County, TX (Austin) | +4.9% | −5.1% | $523,000 |
| Lee County, FL (Cape Coral) | +3.3% | −6.4% | $362,200 |
| Larimer County, CO (Fort Collins) | +8.6% | −1.2% | $569,100 |
| Buncombe County, NC (Asheville) | +4.8% | −4.4% | $391,800 |
| Collin County, TX (McKinney) | +4.4% | −6.1% | $475,600 |
| Sarasota County, FL | +3.8% | −5.5% | $411,800 |
This lines up with what the national trackers are seeing. Florida home values slid about 2.7% over the year, with the Cape Coral–Fort Myers metro down roughly 9% as a wave of new construction and rising insurance costs met softer demand (FHFA). Austin, the poster child of the boom, gave back low single digits after a building spree finally caught up with it — the same supply story we flagged when the builders started moving on from Austin.
Meanwhile, the squeeze quietly moved to the heartland
If wages are winning in the old boom towns, where are they losing? In the places that were supposed to be the affordable answer. Across a band of older industrial metros in the Midwest and interior Northeast, home prices are now rising two to three times faster than local paychecks.
| County | Wage growth | Home-price change | Typical home |
|---|---|---|---|
| Winnebago County, IL (Rockford) | +3.2% | +9.4% | $164,500 |
| Trumbull County, OH (Warren) | +3.5% | +8.4% | $141,800 |
| Oneida County, NY (Utica) | +4.2% | +8.1% | $182,600 |
| St. Louis County, MN (Duluth) | +3.6% | +7.7% | $221,400 |
| Champaign County, IL | +2.1% | +6.4% | $211,500 |
Now, hold the low-base effect in your head before you panic on Rockford's behalf. A 9% rise on a $164,000 home is about $15,000 — a smaller dollar move than a 1% dip on a $570,000 home in Fort Collins. These heartland metros are still far cheaper in absolute dollars, and still cheap relative to local incomes: a typical home runs about two-and-a-half to three times what a household earns, versus four to six times in the Sun Belt names above. Nobody in Utica just got priced out.
The point isn't the level. It's the vector. Affordability is improving fastest exactly where it had gotten worst, and eroding fastest exactly where it was best. The country is slowly un-clumping — the extremes are pulling back toward the middle. That's a healthier housing market than the one where every desirable place ran away at once, even if it stings if you own in the wrong column.
What this means if you're actually house-hunting
A one-year snapshot is a weather report, not a climate. These figures are the latest complete cycle of county data — the 2024 wage and income vintage against Zillow's trailing-year home-value change — and a single year can wobble. We are not calling a bottom, and a county average papers over big differences between a starter home and a lakefront lot. Treat all of this as a starting map, not a verdict.
With that said, three practical reads hold up:
- The Sun Belt correction is real but partial. If you were priced out of Austin, Cape Coral, or Asheville in 2022, the door has opened a crack — lower prices, more inventory, less bidding-war chaos. Just run the actual monthly payment at today's rate before you celebrate.
- The cheap-heartland arbitrage is thinning. The Rockfords and Uticas of the world are still bargains, but the gap is closing. The best time to buy the catch-up trade was a couple of years ago; the second-best time is before the next couple of years of it.
- Compare paychecks and prices, not just prices. "Are home prices going down?" is the wrong question by itself. The one that predicts whether a place is getting livable is: are they going down relative to what people there earn?
That last question is the entire premise of what we build here. Every county's page pairs its home values against local incomes, jobs, and wages, and our housing-market typing sorts the whole country by exactly this kind of tension. The affordability turn isn't national and it isn't uniform — it's a map, and right now the map is redrawing itself.
See which counties are actually getting more affordable
Every county in the index shows home values against local income, wages, and jobs — so you can see where paychecks are winning.
Browse the most affordable countiesFAQ
Are home prices actually going down right now?
In much of the country they're flat-to-slightly-up, not falling — national prices rose about 1.8% in the year through late 2025, the slowest since 2012. But in a chunk of the former Sun Belt boom markets, especially in Florida and Texas, typical home values did decline outright over the year. "Going down" is regional, not national.
If prices fell, does that mean homes are affordable now?
Not necessarily. A price dip on an expensive home still leaves an expensive home, and with mortgage rates near 6.6%, monthly payments haven't fallen nearly as much as sticker prices. Affordability improved at the margin in these markets; it did not reset to pre-2020 levels.
Is now a good time to buy in the Sun Belt?
It's a better time than 2022, with more inventory and less competition. Whether it's a good time for you depends on the monthly payment at today's rate, how long you'll stay, and your own job and family picture — none of which a county average can tell you. This is data to inform a decision, not the decision.
Why are cheap Midwest towns getting more expensive?
Partly catch-up: homes that were unusually cheap relative to local incomes have room to rise, and demand has drifted toward affordability as the coasts and Sun Belt got stretched. The percentage gains look dramatic because they start from a low base — the absolute dollar increases are still modest compared with the Sun Belt's.