Pacific Northwest Cities Lead the List of Top 5 Cities With the Worst Housing Market Outlook

The housing market has been a tough nut to crack for house hunters in recent years, with record-high home values and limited inventory pricing many out of the market. However, the dynamics of the housing market have started to change in 2025, with a general increase in the number of homes for sale.

Despite this positive trend, there are still pockets of the country where finding a home remains a challenge, especially in the Pacific Northwest. In fact, that region is home to three of the five U.S. cities with the worst housing market outlook, according to a new analysis from LendingTree.

LendingTree based its rankings on four key metrics: vacancy rates, housing unit approvals per 1,000 housing units, home value-to-income ratio, and annual changes in home value-to-income ratio. Low vacancy rates indicate heavy demand and high prices, while a high home value-to-income ratio is a sign that homes are comparatively expensive.

The main problem house hunters face in these cities is that there simply aren't enough homes available to buy. According to Matt Schulz, LendingTree's chief consumer finance analyst and author of "Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life," "The vacancy rates in Portland and Boise are less than half of those in many other big metros. When that happens, prices rise, making things even more expensive." Unfortunately, this isn't likely to change in many of the most troubled metros because the data shows that insufficient building is being done.

In other parts of the country, however, market dynamics are trending in favor of buyers. Pending home sales in the U.S. decreased 6.3% in April, according to the latest data from the National Association of Realtors (NAR). A decline in sales typically means sellers have to make more concessions to buyers. "Homebuyers in nearly every region of the country are in a better position to negotiate more favorable terms," NAR Chief Economist Lawrence Yun said in a statement.

In conclusion, while the housing market is improving overall, there are still pockets of the country where finding a home remains a challenge. House hunters in these cities should be aware of the high prices and limited inventory and be prepared to make concessions or consider alternative options like renting or moving to a different area with more affordable housing options.