DOGE cuts could hit home prices hardest in these 14 cities

• Spring is often a good time to sell a house, though that may not hold true in 2025.
• Home supply is rising, and government spending cuts may boost inventory even further.
• Here are 14 cities where prices could fall in the coming months.

Homeowners looking to relocate would normally be in luck as the weather warms up.

Spring usually ushers in the start of the busy season in the US housing market. In fact, a new report from Realtor.com remarked that the single best week to list a home is in mid-April, since median prices and buyer demand are robust, while competition and price cuts are relatively low.

But this year could be completely different — if buyers realize how much leverage they have.

Sellers' bargaining power is waning as steadily surging home inventory puts property prices under pressure, according to an analysis of Realtor.com's data on the 50 largest US markets.

And that's before accounting for the potential fallout from the sweeping budget cuts by the Department of Government Efficiency. Elon Musk, who runs the newly formed DOGE, plans to eliminate government jobs in droves, which could cause a mass exodus from cities like Washington, DC — thereby bringing down home prices in certain markets even further.

Buyers are back in the driver's seat as supply rises

For years, buying a house has been a painful process. Home affordability was in the tank since prices and mortgage rates were uncomfortably high, making ownership unattainable for many. And a widespread home shortage complicated the process for everyone, even wealthier buyers.

However, significant increases in home supply are shaking up the US real-estate market.

Active home listings rocketed 27.5% higher in February, Realtor.com reported late last month. That marked the 16th consecutive month that there were more houses available on a typical day than in the year prior, though supply is still rather stretched relative to pre-pandemic levels.

Similarly, the number of unsold homes — which accounts for those already under contract — had been up by 18.2% from early 2024, which made for the 15th straight month of growth. That includes newly listed homes, which were 4.2% more common compared to last February.

Major inventory improvements have made homes harder to sell. US houses had been for sale for about 66 days in February, versus just over two months last year. Properties have spent more time on the market than the year prior for the past 11 months, Realtor.com noted, and listings lingered longer than last year in 42 of the 50 largest US cities.

More houses on the market means that bidding wars have largely become a pandemic-era relic. Instead, sellers are resorting to price reductions to entice buyers. Nearly 17% of listings in February had received at least one price cut at some point, versus a 14.6% rate a year earlier.

"Sellers are increasingly adjusting to slower market conditions, as the share of homes with price reductions rose significantly last month," Realtor.com researchers Sabrina Speianu and Danielle Hale wrote late last month. "This trend could indicate a potential slowdown in price growth."

Median US home prices slipped 0.8% from last year to $412,000 in February, Realtor.com had found. It's worth noting that values were up 1.2% on a price-per-square-foot basis, suggesting that cheaper, small homes went to market.

Either way, prices aren't moving much, which is a win for hopeful buyers after years of explosive price growth. Even more exciting for them is the idea that home values could decline further.

14 cities where home prices could fall after Elon Musk's cuts

If DOGE's cuts to the federal government's workforce are as widespread as Musk would like, tens of thousands of employees may be looking for new places to live. Home listings could balloon in cities brimming with government workers, which could deflate their values.

This dynamic doesn't seem to be swaying home prices yet, Realtor.com's economic researchers said, noting that there isn't a discernable difference in prices, price reductions, inventory growth, or time on the market. However, they could certainly see that changing in the coming months.

"Federal workforce reductions could have ripple effects on housing markets with a high concentration of government employees," Speianu and Hale wrote. They added: "The typical home seller takes at least two weeks and often longer to prepare a home for sale, so any real impact is likely ahead."

Below are the 14 US cities where federal government employees make up at least 2% of the workforce, meaning their housing markets are most in danger of being shaken up by DOGE. Note that only the 50 largest markets tracked by Realtor.com were included in this analysis.

Along with each location its median listing price in February, its year-over-year price growth in aggregate and on a per-square-foot basis, its listing price growth since the start of this year, and the percentage of federal government employees as a share of its working population.