10 Housing Markets Expected to See the Biggest Price Drops in 2026

As the housing market predictions take shape for 2026, one thing is clear: home prices in Louisiana are sinking faster than in the rest of the country.

Six metros in the state — including New Orleans, Lafayette and Shreveport — are among the nation’s 10 markets projected to see the steepest price declines over the next year, according to Mortgage Research Network’s analysis of Zillow data.

Here’s a look at the full list of the 10 metros that may see the largest price drops in the year ahead.

Why the South Is Struggling

The common thread among the Louisiana metros? Skyrocketing home insurance premiums and an inventory glut that’s tanking home prices.

Homeowners in the state saw an average annual insurance premium of $2,603 — the second-highest in the country just behind Florida — in 2022, according to data from the National Association of Insurance Commissioners (NAIC).

"Insurance premiums are a major driver of the cost of homeownership across the U.S.," said Kara Ng, a senior economist with Zillow Home Loans. "It's up almost 50% in just five years, largely due to natural disasters rising, construction costs and just overall higher home values."

Soaring home insurance isn’t the only reason the South is seeing home prices dip. Growing exposure to more frequent, severe storms, climbing replacement costs and overbuilding. When the math stops penciling out, sellers list their homes, inventory builds, and prices weaken.

If they have a mortgage that they've locked in, but pending costs of homeownership like repairs or insurance premiums are adding up," Ng added, explaining why homeowners might consider selling even if they have a low pandemic-era mortgage rate.

During the pandemic housing boom, buyers rushed to the Sunshine Belt in search of more affordable homes at rock-bottom mortgage rates. Builders ramped up construction, leading to oversupply, especially in Florida, which is seeing homes sit on the market longer for far less money than during the housing rush.

"What we've seen is that a lot of areas in the South actually have more homes available for sale than before the pandemic," Ng said. "That's not true nationally."

Finding Areas of Opportunity

For many homebuyers, the delicate dance of finding affordable housing in an area with a solid economy and ample jobs is becoming harder. But it’s not impossible.

Your first step? Work with a real estate agent in the area you’re interested in. An experienced local agent will know about up-and-coming neighborhoods, price reductions and even new-build communities that meet your needs and budget. They can also help you narrow your search and save time if you have a specific buying window in 2026.

For buyers targeting markets where home values are falling, ask your agent to investigate why. Some factors might be problematic, like higher foreclosure activity, declining jobs due to layoffs and fewer new businesses created, higher crime rates, or home inventory piling up with fewer home sales.

Make sure to shop around for home insurance rates with a few companies to ensure the properties you’re interested in have affordable rates. Also, use FEMA’s flood map service to check whether or not a target property is in a federally designated flood zone.

Finally, consider the total cost of homeownership and not just the home’s price tag. This includes property taxes, homeowners association fees, maintenance/repair costs and, of course, home insurance. In declining markets, understanding these expenses will help you make a better-informed buying decision.

Methodology

Mortgage Research Network used Zillow Home Value Forecast (ZHVF) All Homes, Seasonally Adjusted, Mid-Tier data from December 2025. We then analyzed the top 400 metros in the U.S to find the 10 metros with the biggest potential declines in 2026.