53% of US homes lost value in past year, new research shows

More than half of homes in the U.S. lost value over the past year, marking the highest share of properties to depreciate in more than a decade. 

Research from Zillow revealed that approximately 53% of all U.S. homes have lost value since last year, up 14% from a year ago. It’s notable given that a share this big has not been seen since the tail end of the Great Recession – around 2012 – when home prices and household wealth started a meaningful recovery.

Zillow senior economic researcher Treh Manhertz said “homeowners may feel rattled,” but it’s more common in today’s cooler market environment than in recent years.

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Homes in Aldie, Virginia, on Tuesday, Feb. 20, 2024. (Photographer: Nathan Howard/Bloomberg via Getty Images / Getty Images)

Most homes have lost value from their peak, falling 9.7% on average. It is much larger than the 3.6% reported in spring 2022, but about level with pre-COVID-19 pandemic rates, according to the report. It is still well below the 27% average drawdown in early 2012. 

A “for sale” sign on a house in Philadelphia, Pennsylvania. (Joe Lamberti/Bloomberg via Getty Images)

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Manhertz also noted that despite the rise in devalued homes, only “relatively few” are selling at a loss. Zillow said that the home’s value between sales matters more than losing value overall.

“Home values surged over the past six years, and the vast majority of homeowners still have significant equity. What we’re seeing now is a normalization, not a crash,” he added. 

In October, 4.1% of homes were valued lower than when they last sold, up from 2.4% last year. However, it is still lower than the 11.2% of homes in the same position before the pandemic.

A sign is posted in front of a home for sale in San Rafael, California. (Justin Sullivan/Getty Images)

The data showed that national home value appreciation has been flat over the past year, but most homeowners have seen their property values climb significantly in the time that they have owned them. Median home values jumped 67% since purchase, which is roughly eight and a half years ago.

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The Zillow report showed that certain metros saw an even bigger jump due to supply constraints, with the values of homes in Buffalo rising 108%. Values of homes in San Jose jumped 97% and 95% in Providence, 90% in Columbus and 88% in San Diego.

Another factor driving up values in these areas is that owners in those spots tend to stay in their homes longer than average, according to Zillow.