Lead
As of October 2025, 53% of U.S. homes have lost value over the past year based on their Zillow Zestimate — the highest share of depreciation in 13 years. The sharp increase underscores a cooling housing market with potential implications for inflation, interest rates, and broader risk sentiment.
Key Developments
- 53.0% of homes showed year-over-year declines in estimated value as of October 2025
- Measure reflects the share of Zestimates down over one year across the United States
- Historical trend from 2012 to 2025 shows fluctuations with a notable rise heading into 2025
- Data indicates the largest proportion of home value declines in over a decade
For background on the metric, see Zillow’s research resources: Zillow Research
Why It Matters
- Inflation dynamics: Softer home prices may eventually ease the shelter component of inflation, a key focus for policymakers
- Household balance sheets: Widespread price declines increase downside risk for recent buyers and may affect consumer spending via the wealth effect
- Affordability trade-offs: Lower home values can modestly improve entry affordability, though high mortgage rates continue to constrain purchasing power
Market Impact
- Macro signaling: A broadening housing cooldown is a key macro signal watched by equity and bond markets
- Crypto correlation: Digital assets often react to shifts in liquidity and risk appetite; a cooling housing market that contributes to lower inflation could, over time, influence expectations for interest-rate paths and risk-taking behavior
What to Watch Next
- Shelter inflation prints in upcoming CPI reports
- Mortgage rate trajectory and credit conditions for buyers
- Regional dispersion in price trends as local markets adjust at different speeds
- Updates to housing data, including subsequent readings of Zestimates and transaction-based indices
Conclusion
The jump to 53% of homes posting year-over-year declines highlights a pivotal turn in the U.S. housing cycle. Investors across traditional and digital assets will be watching how this trend interacts with inflation and rate expectations in the months ahead.