Zillow reports major home price, mortgage rate move | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Given current widespread concerns about home affordability, it’s worth examining some recent housing market history to provide context for where we are today.

That’s because real estate technology company Zillow has identified current homeownership trends that can be better understood by comparing them to housing data from 13 years ago.

The Great Recession, which occurred from December 2007 to June 2009, was triggered by several factors.

The bursting of the housing bubble

In the early 2000s, easy credit and speculative buying fueled a housing boom.
Risky subprime loans were bundled into mortgage-backed securities and sold widely.
As defaults rose, those securities collapsed and triggered a financial crisis.
Home prices fell sharply nationwide, and foreclosures surged across communities.
By 2012 — 13 years ago — home values had dropped more than 30% from their 2006 peak, marking the bottom.

The road back to rising home prices

In an effort to dig out of the financial crisis, the Federal Reserve cut interest rates and launched quantitative easing to stabilize credit markets.
Federal programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) allowed struggling borrowers to refinance or restructure loans.
Investors and first-time buyers began purchasing homes at discounted prices.
Years of limited construction left housing supply tight as demand slowly returned.
By the mid-2010s, home prices had risen steadily again, setting the stage for the affordability challenges of today.

Zillow explains home price, mortgage rate trends

While 2012 marked the home-price bottom, increasing prices since then have given rise to the current affordability crisis affecting potential homebuyers.

From mid-2024 through mid-2025, the housing market was defined by a sustained lack of inventory. The limited number of homes that did come up for sale were often priced beyond what many buyers could afford.

During this stretch, mortgage rates averaged 6.69%, further eroding affordability and discouraging entry-level buyers, the National Association of Realtors (NAR) found. Many prospective first-time purchasers stepped back, while current homeowners saw their equity continue to rise.

The market grew increasingly divided, with cash transactions reaching unprecedented levels even as participation from first-time buyers fell to historic lows.

Their share dropped to just 21%, and the typical age of those entering the market for the first time climbed to 40, according to the NAR.

Now, real estate technology company Zillow reports that more than half of U.S. homes lost value in the past year, the most since 2012.

Zillow finds major home-price declines in housing market

“Home values are falling for more than half of U.S. households. New research from Zillow shows 53% of all U.S. homes have lost value since last year — the highest share since 2012, the tail end of home value declines after the Great Recession,” Zillow reported on Nov. 17.

Zillow explained some nuances in the data, showing that, despite this, most homeowners have not seen their house values decrease since they bought them.

“The vast majority of homeowners have seen their home values rise substantially in the time they’ve owned them — 67% growth at the median — and losses are rare; just over 4% of homes have lost value since they were last sold, a smaller share than before the pandemic,” Zillow wrote.

More on homebuying:

Home prices nationwide have shown little overall growth in the past year, yet that headline figure masks sharp differences across regions, cities, neighborhoods, and even individual properties, according to Zillow.

By October, Zillow data indicated that 53% of homes had declined in value compared with a year earlier. That portion is up dramatically from 14% the year before and represents the largest share of homes losing value since April 2012, when the housing downturn was bottoming out.

“Homeowners may feel rattled when they see their Zestimate drop, and it’s more common in today’s cooler market environment than in recent years. But relatively few are selling at a loss,” said Zillow senior economic researcher Treh Manhertz.

“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.”

Zillow sees positive housing market signs

Most homeowners have seen strong gains in property values, Zillow found.
Nationally, the median increase since last sale, about eight and a half years ago, is 67%.
Certain metros with rapid growth and limited supply have posted much larger gains, including Buffalo (108%), San Jose (97%), Providence (95%), Columbus (90%), and San Diego (88%).
Longer homeowner tenure in these markets has contributed to the outsized appreciation.
From peak levels, the average decline in home values stands at 9.7%, little changed in recent years.
This setback is larger than the 3.6% dip in spring 2022 but similar to pre-pandemic averages.
It remains far below the 27% average decline recorded in early 2012 during the housing crash.
What matters most is value change between sales, not just peak-to-trough shifts.
In October, 4.1% of homes were worth less than their last sale price.
That share rose from 2.4% a year earlier but is still below the 11.2% seen before the pandemic.
Limited inventory suggests most sellers are not under pressure to discount.
Only 3.4% of new listings were priced below their previous sale value.
This figure is up from 2.1% last year but remains well under the 2019 level of 5.9%.