03:38 PM EDT, 08/18/2025 (MT Newswires) -- Home values dropped annually in half of the 50 major US metro areas in July as price cuts hit an all-time high, while the remaining half saw valuation gains amid robust demand, Zillow Group ( ZG ) (Z, ZG) said Monday.

Most of the 25 major metros to see valuation declines last month were either in the South or West, led by Tampa and Austin.

Values mostly increased in the Midwest and Northeast, led by Cleveland and Hartford. However, Zillow ( ZG ) said the overall annual gains were "modest compared to the rampant double-digit growth" recorded three or four years ago.

"Demand is high -- especially in affordable areas -- but building restrictions put a damper on new and higher-density projects," the data provider said. "Sellers have few options to move up to, and existing inventory is still below pre-pandemic averages in many metros."

Sellers reduced prices on 27.4% of listings in July, up from 26.5% the month prior and the highest share since Zillow ( ZG ) started tracking the metric in 2018, according to the report.

"Perhaps more than ever, whether it's a good time to buy depends on where you live," Zillow ( ZG ) Senior Economist Kara Ng said in a statement. "A defining trait of this market is that buyers are gaining leverage that most of them can't use, because cost barriers are too high."

The typical US home value rose 0.2% year over year to $367,965 in July. While affordability has improved amid lower interest rates and low price growth, mortgage payment remains almost $1,000 more a month than it was before the pandemic, according to the report.

"Buyers forced to the sidelines means less competition for those who can still afford it," Ng said. "Affordability is gradually improving where builders have been able to keep up with demand, showing why continuing to build is so critical."

The report showed that competition among homebuyers continued to drop, hitting the lowest point for any July since at least 2018. Some 27 major markets were either balanced or in the favor of the buyer in July, three more than the month prior and nine more than a year earlier.

Price: 84.70, Change: -0.41, Percent Change: -0.48