Home Prices Soften in Florida, Texas, Utah and Colorado. Is Your City Next?

Get housing solutions now in our Real Estate Master Class on June 14, 2025 (online). Email [email protected].

Home Prices Soften in Florida, Texas, Utah and Colorado.
Is Your City Next?
 
Vero Beach and Punta Gorda, Florida, Duluth, Minnesota, Boulder, Colorado, Logan and St. George, UT, and Sherman and Abilene, TX saw home prices weaken by -4.6-8.2% in the 1st quarter of 2025. What is causing home prices to fall in these regions? Is it contagious?
 
 
It should be noted that the weakening in prices is not making these homes affordable. Unaffordability is still a crisis. However, what it is doing is freaking out anybody who purchased a home recently, especially in these areas, and particularly if they only put 5% down and don’t have any equity built-up. Rather than worry, let’s dive into the details to see if the downturns are harbingers of things to come, or if there are other factors that will keep prices rising.
 
Here are the topics we will cover in this blog.
 
Areas Where Housing Prices Are Starting to Retreat
Why Are Some Markets Falling While Others Are Popping?
The Affordability Crisis
Will Prices Ever Correct?  
Housing REITs
Malls and Office Buildings
Mortgage Lenders
 
And here is more information on each topic.
​
Areas Where Housing Prices Are Starting to Retreat
Here are the top 10 areas where we are starting to see prices soften (source: National Association of Realtors Q1 2025 Metro Home Prices Report).

Even though there has been a slight downturn in the cities listed above, the general trend is still upward for most regions and cities. See the top cities that are increasing in sales price below.

Source: National Association of Realtors Q1 2025 Metro Home Prices Report.

Despite the price gains listed above, Attomdata’s report of June 12, 2025, identified California and New Jersey as states that were most at risk of price declines. According to their report, “The data shows that 23 of the 50 most at-risk markets were in California (14) and New Jersey (9). Risk was determined by affordability, proportion of seriously underwater mortgages, foreclosures, and unemployment rates.”
 
Why Are Some Markets Falling While Others Are Popping?
According to Nadia Evangelou, the senior economist and director of real estate research of the National Association of Realtors, “Most of the metro areas seeing home-price softening are in states that experienced a strong increase in housing supply – like Florida, Texas and Utah. In these states, housing inventory is now higher than pre-pandemic levels. The additional housing supply has helped moderate price gains.”  

The demand for housing remains strong, not just from Millennials and Gen Z, but also from interstate and international migration. According to Ms. Evangelou’s blog, Texas led the trend of Americans moving to another state, with 85,267 net domestic movers, while Utah saw almost a seven-fold increase in 2024 from 2023. (That Census Data report doesn’t include 2025 data.) However, the most notable trend was international migration, which accounted for 2.8 million additional people in the U.S. in 2024 – 84% of the population growth (3.3 million).
 
One of the reasons that home prices are increasing has a lot to do with the low supply of available homes for sale. Normally, there comes a point when elders will downsize, or those with starter homes will buy something bigger. However, most people who have owned their home for more than five years have a very low fixed mortgage interest rate. They know that if they sell, they will pay more in price and in interest for less than what they already have. So, people are hanging on, even when they might really need to make a move. For instance, have you noticed a lot of unkept lawns in a particular neighborhood where there are not any for sale signs? A lot of the homeowners that are really strapped are hanging on and trying to cut corners in other ways.
 
The Affordability Crisis
According to AttomData, in pretty much all of the United States, it would require 32% or more of the average income in the area to be able to purchase a home. That is above what most people would qualify for even if they did have a pretty good FICO score. It’s also unsustainable, particularly given the cost of transportation, health insurance, healthcare food, and other basic needs.
 
Unaffordability has a lot to do with another statistic – buyer’s remorse. According to a survey by Clever Real Estate, 73% of first-time buyers had regrets about their recent purchase, 30% felt “in over their heads financially since purchasing their home,” while almost a quarter of those surveyed (23%) said their overall financial situation had gotten worse since the purchase.

What could fix the affordability crisis?
 
Will Prices Ever Correct?  
A recession typically causes prices to fall (both stocks and real estate). If homeowners got out over their skis and are burning through money to keep a place, that becomes nearly impossible when they lose a job or if their wealth plunges in a Bear Market. Will student loan debt take Millennials out of the market, now that defaults are being reported? The percentage of Millennials buying a new home has dropped from 38% to 29%. (Gen Z is still a much slower percentage of buyers.) Today, demand is still outpacing supply. However, we want to be forward-thinking, particularly with real estate, which is a long-term commitment.
 
Recently, many distressed homeowners were able to hang onto their home through loan mods – another factor keeping supply constrained. During the process, whatever was unpaid, along with fees, was tacked onto the total, leaving many homeowners severely underwater on their loan (25% or more owed than the value). 2.8% of homeowners (2.38 million) fall into this category – up from 2.5% in the 4th quarter of 2024.
 
Delinquencies on mortgage debt are near historic lows, at just 1.22%. Foreclosures have started to increase, particularly in New York City, Chicago, IL, Houston, TX, Los Angeles, CA and Miami, FL, but are still very low (source: Attomdata).

 
With so many hanging on for dear life and so many ways to do it, it’s hard to know what’s going to fix the affordability crisis. (Banks and policymakers learned a lesson from the Great Recession in that you don’t want everyone to lose their homes back at the same time.) That is why we need to come together as a family (chosen family counts, too) to solve this crisis for ourselves, while the politicians delay delay delay, kicking the can down the road with ever more financial engineering instruments that are designed to keep prices from plunging.
 
Join us this Saturday for our annual Real Estate Masterclass. There are solutions for unaffordable housing. However, they are not found in the mainstream media or in the financial noise that we hear all day long about how terrible things are. Check out the flyer on the homepage at NataliePace.com. Email [email protected] to learn more and register now.

Housing REITs
While apartment building REITs are doing well, home builders are getting hit with a contraction in their revenue. In addition to high prices and fewer buyers, builders have a large amount of debt that they have been carrying since the Great Recession, when many of them were hanging on by a thread. Email [email protected] if you would like our updated housing REITs stock report cards, including builders such as KB Home and Toll Brothers.
 
Malls and Office Buildings
Malls and office buildings continue to experience very high vacancy rates which exacerbates their low margins or net losses and exorbitant debt loads. Macerich had to give Santa Monica Place (a mall) back to the lender in 2024. Community banks that loan to commercial real estate REITs in areas of high vacancies, including New York Community Bank (now called Flagstar Financial), are experiencing challenges. This is one of the reasons why we are underweighting financials in our small and mid cap funds in our sample pie charts.
 
If you would like to learn more about our time-proven diversified strategy for managing your wealth plan, including your company-sponsored 401(k), join us at our next Financial Freedom Retreat online. If you register by June 30, you’ll get the best price and a complimentary 50-minute private prosperity coaching session (value $400).
 
Mortgage Lenders
Mortgage lenders are suffering from the same fate as builders. Fewer people are qualifying for mortgages, so their year-over-year revenue is contracting. Many mortgage lenders went belly-up or were bailed out in the Great Recession. The survivors are carrying very high debt loads.
 
This is another reason to underweight financials. Large lenders, including banks, insurance companies and pension providers, are also exposed to commercial real estate and illiquid long-term loans, increasing the risk of holding bank or insurance investments or products that are not FDIC-insured. Although structurally significant banks and insurance companies are likely to be bailed it if they get into distress (ala 2008), Main Street investors typically lose all of their stock investment and a big portion of their bond principal. For this reason, we are also underweighting US financials in large cap value funds. There are some interesting options in other countries for these value fund replacements. Some of the funds even offer better credit quality, along with a better income and yield.
 
Bottom Line
Housing is a crisis in the United States right now, particularly for anybody under the age of 45. However, there are always solutions. Many of them are just not found in the mainstream media. That is why I am encouraging you to join us this Saturday for our Real Estate Masterclass. Whether you:
 

• Feel like you’re doing OK,
• Need to downsize,
• Are ready to buy a home to raise a family,
• Are sick of making the landlord, rich, or,
• Are wondering if you should buy in another country – whatever your real estate question or need is –

 
wisdom is the cure.
 
Ensuring that we do not join the millions of homeowners who have buyer’s remorse, an underwater mortgage, are property rich but cash poor, or buy a money pit that breaks us, requires more than just hiring a realtor or following a guru and shopping on the MLS. Getting the equation right is tricky today. However, a solid plan that incorporates innovative options and resources could bring home ownership, and all of the positive things that building equity brings to us. Email [email protected] or call 310-430-2397 to register now.
 
 

This Saturday on June 14, 2025, attend our online Real Estate Master Class. You'll discover the 10-point checklist for home buyers and sellers, as well as some overlooked areas of opportunity. Register now to join us at our online Financial Freedom Retreat Oct. 11-13 2025 where you'll learn how to protect your wealth, save thousands annually in your budget and how to hedge in a volatile Debt World. If you'd like a life-changing adventure of a lifetime, be our guest at a royal manor house in Cornwall, England, March 12-19, 2027. (With just eight rooms available, this exclusive, private, bucket-list adventure sells out a year in advance!) Call 310-430-2397 or email [email protected] to learn more. The 2025 Restormel Retreat was a magical and royal experience. Click to learn more. 

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Visit NataliePace.com to learn more. Call 310-430-2397 or email [email protected] for pricing, additional information and to register.

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Photo: Natalie Pace with her son on Good Morning America discussing housing solutions.

Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is (2nd edition) are the most recent releases of these books. Follow her on Instagram. 
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Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.​​

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.