Housing Divide Widens Across America as Prices Soar in Some Regions, Plummet in Others

As of August 3rd, 2025, the U.S. housing market is experiencing a stark divide, with home prices climbing in the Northeast and Midwest while declining in parts of the South, particularly Texas and Florida. This divergence is driven by differences in housing supply, zoning laws, and climate concerns across the country.

In areas with limited new construction, often due to strict zoning regulations and scarce land, home prices are holding firm or rising. In contrast, Sun Belt regions with abundant new homes are facing falling prices as builders and homeowners sell amid rising insurance costs and climate risks.

The supply dynamic is critical, with homebuilders in the South needing to sell quickly, often at lower prices, unlike existing homeowners in the Northeast and Midwest who can wait out a sluggish market. As one expert noted, "It's so much easier to do construction in the South. So you have a lot more new construction."

Climate concerns are also playing a role, with homeowners in states like Florida and Texas, including those with second homes, increasingly "tired of hurricanes" and choosing to sell. This is contributing to the price declines in these Sun Belt regions.

Overall, the U.S. housing market is divided, with some areas experiencing continued price growth while others face falling values, reflecting the complex interplay of supply, zoning, and climate factors shaping the real estate landscape.