HAMMOND — Louisiana’s housing market is facing a downturn, with five of the nation’s top ten cities projected to experience the weakest home price appreciation in 2025, according to Zillow’s latest Home Value Index.
Zillow recently released its Home Value Index for 2025. The interactive housing market map shows the competitiveness and marketability of housing markets around the country.
Louisiana cities lead in home price declines
The report forecasts a 1.1% increase in home prices nationwide from January 2025 to January 2026, a slowdown from the previous year’s 2.9% rise. However, in Louisiana, several cities, including Lake Charles, Houma, New Orleans, Lafayette, and Shreveport, are expected to see price declines, with Lake Charles leading the nation at a projected 7.3% depreciation.
Zillow’s data highlights that of the ten U.S. markets expected to experience the weakest home price appreciation, Louisiana cities claim the top five spots:
- Lake Charles: -7.3% year-over-year decline
- Houma: -6.4%
- New Orleans: -5.1%
- Lafayette: -4.1%
- Shreveport: -3.9%
Alexandria is the other Louisiana city on the link, ranking 10th nationally with a 2.5% decline.
Baton Rouge remains firm as other markets struggle
Despite these struggles, Baton Rouge’s housing market remains stable, with Zillow estimating a 2% increase in home values year over year and a median home price of $215,000.
Stephen Couvillion, a Baton Rouge realtor and founder of the Couv Group, attributes the price drops elsewhere to rising homeowner’s insurance costs.
Since 2020, eleven insurers writing policies in Louisiana have gone insolvent while more than ten others have submitted withdrawal notices.
Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort for homeowners unable to obtain coverage, now has more than 100,000 policyholders making it the sixth largest insurer in the state.
“The insurance world has drastically affected the real estate market just because of how many insurance carriers have left the state,” Couvillion said. “I think Baton Rouge has remained constant because we’re in a much better spot when it comes to the storms.”
Another key factor stabilizing Baton Rouge’s housing market is new construction in the Greater Baton Rouge area, Livingston Parish, and the North Shore. Increased housing availability in these regions is helping offset negative trends seen elsewhere.
Tiffany Helg, a realtor with Blue Heron Realty, says the market is still adjusting from historic post-pandemic home sales and previously low 2% interest rates, creating challenges for both buyers and sellers.
“We saw people paying well over appraised values, and now, anyone trying to sell at the top of the market, is not seeing much appreciation if at all,” Helg said. “Sellers have unrealistic expectations about the value of their homes and buyers can’t afford top prices with inflated interest rates.”
Helg also agreed that the lack of affordable homeowners insurance is killing home sales faster than rising interest rates, particularly in the Greater New Orleans area, including Tangipahoa, St. Tammany, Washington, and St. Helena Parish. THese areas have seen a decline in median home sale prices since December of last year.
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