News Summary
A recent study reveals that Louisiana’s housing market continues to struggle, with major cities like New Orleans expected to see significant drops in home values. This decline is attributed to rising interest rates, inflation, and high insurance premiums. Notably, Houma and Lake Charles are projected to experience the steepest declines, while no city in Louisiana is expected to witness an increase in home values over the next year. Real estate experts are concerned about the market’s future, but affordable housing initiatives may provide some relief.
New Orleans – A new study reveals that Louisiana’s housing market, which has been struggling for over two years, is set to experience further declines in home values. According to a report from home lister Zillow, six cities in the state, including New Orleans, are projected to see greater drops in home value compared to the national average over the next 12 months.
Among the cities forecasted for the worst home value declines are Houma, with an estimated 9.4% decline, and Lake Charles, expected to decrease by 8.9%. New Orleans follows with a projected decline of 7.2%. Other cities, including Lafayette, Shreveport, and Alexandria, are also predicted to experience decreases. Notably, Opelousas is anticipated to see the highest decline in home values among the larger group of 500 housing markets at 11.6%, while Morgan City is projected for a 10.6% drop.
No city in Louisiana is expected to witness an increase in home values in the upcoming year. Baton Rouge is forecasted to have the smallest decline at 3.6%.
Current Market Trends
In a recent report by the University of Mississippi, New Orleans ranked last out of 100 U.S. cities in its housing market assessment. This has led real estate experts to categorize New Orleans as “the toughest city in America for real estate.” The adverse conditions plaguing Louisiana’s housing market are largely attributed to a combination of inflation, rising interest rates, and soaring property insurance premiums.
In 2024, the situation worsened, as home prices decreased in two-thirds of New Orleans ZIP codes compared to the previous year. Data indicated that New Orleans home prices fell approximately 14% below their long-term inflation-adjusted trends. For context, while Baton Rouge has historically exhibited less volatility in house prices compared to New Orleans, both cities are now witnessing a prolonged decline when adjusted for inflation.
Recent Market Data
As of June 2025, the average home price in the New Orleans metro area stood at $365,181, showing a 3.8% year-over-year increase. However, this comes with a significant decrease in home sales; the New Orleans metro area saw a 24.3% drop in home sales, recording just 1,012 transactions in June 2025, down from 1,336 the previous year. The total home sales for the first half of 2025 reached 5,768, a decline from 6,417 during the same period in 2024.
Insurance and Economic Factors
Rising property insurance premiums have significantly affected home sales in Louisiana, with the average premium now at $4,274 annually—substantially higher than the national average of $2,230. Additionally, economic factors such as a declining population and a sluggish economy contribute to the overall downturn in the housing market.
Looking Forward
In response to the housing crisis, the Housing Trust Fund has been established to promote the creation and preservation of affordable housing in New Orleans. Despite ongoing challenges, there remains steady demand for housing in desirable neighborhoods, and future projects are anticipated to stimulate economic growth and alleviate housing shortages. Experts believe market conditions could improve, especially if interest rates begin to decline.
As Louisiana’s housing market continues to face difficulties, stakeholders are urged to consider these findings while navigating a complex landscape and strategizing for a more resilient future.
Deeper Dive: News & Info About This Topic
HERE Resources
Joseph Corte Canizaro: A Legacy in New Orleans Development
Challenges Facing New Orleans Real Estate Market
Joseph C. Canizaro, Influential Developer in New Orleans, Passes Away
Historic Bayou St. John Loft Hits Market
Louisiana’s Housing Market Faces Affordability Challenges
Home Buyer Louisiana Transforms New Orleans Housing Market
Rêve Realtors Expands with New Office in Covington
Louisiana Lawmakers Reject Key Insurance Relief Bills
Alo Yoga Opens First Store in Louisiana at Lakeside Shopping Center
Louisiana Ranks Sixth-Worst in State Economy Analysis
Additional Resources
- NOLA: New Orleans Real Estate Market Rank
- Wikipedia: New Orleans
- FOX 8 Live: Metro New Orleans Housing Market
- Google Search: New Orleans housing market
- Biz New Orleans: New Orleans Real Estate Market
- Google Scholar: New Orleans real estate market
- NOLA: Louisiana Home Prices Forecast
- Encyclopedia Britannica: Louisiana housing market
- New Orleans City Business: Home Sales Prices Trend
- Google News: New Orleans home sales
