Sunbelt housing panic grips as prices plummet in seven states, while New York leads national gains
Zillow data show sunbelt declines, with Florida and California posting the largest losses; the national market remains at a record high as demand and supply shift
Housing markets across the Sunbelt have cooled sharply, with seven states recording year-over-year declines in total market value for the period July 2024 through June 2025, according to data compiled by Zillow. Florida posted the steepest slide, with a $109 billion decline, followed by California at $106 billion. Texas shed $32 billion, while Arizona and Georgia each lost about $1 billion. Outside the Sunbelt, Hawaii's market fell by $1 billion and the District of Columbia by $2 billion.
Despite the regional pullback, the overall U.S. housing market remained at a record high, with total value topping $55.1 trillion. New York led the gains, adding $216 billion in market value over the past year—the biggest increase of any state and roughly one quarter of the national growth, which totaled $862 billion for the period. Other sizable contributors included New Jersey, Pennsylvania, Illinois, Ohio, Michigan, Virginia and Massachusetts, each posting double- or triple-digit billions in increases.
The Sunbelt losses come as homeowners face higher costs after a string of natural disasters, which have pushed up insurance premiums in several states. Florida homeowners pay the nation's highest average annual premium, about $2,437, while Texas homeowners pay about $2,146, according to Insurance Information Institute data. A growing condo crisis in Florida has also driven some owners to list, while rising home prices earlier in the pandemic era have dimmed affordability in markets like Miami, Tampa and San Diego.
Rising expenses and shifting migration patterns have also shaped the dynamics. Data from SmartAsset show that in 2023, wealthy New Yorkers who moved to Miami saved an average of $88,036—28 percent less than the $122,956 they typically saved in 2019. Those moving from New York City to Austin in 2019 would have saved about $154,564, but last year the savings were about $116,195, a gap of roughly $38,000.
Developers have responded to the changing demand by expanding rental supply. More than 500,000 new apartments are planned or under construction in Sunbelt metro areas this year, led by Dallas, Austin, San Antonio and Houston. Analysts say the wave of new construction helps explain why rental markets earlier in the pandemic era are shifting and why some buyers who previously sought homes are competing with investors for a seat in the rental market.
Meanwhile, rents in some Sunbelt markets cooled last year; Redfin data show Austin and Jacksonville posting the largest rent declines in the country last summer as occupancy rose and supply expanded. The mixture of higher mortgage costs and cheaper rents in new rental stock has drawn more households away from ownership toward renting.
Orphe Divounguy, senior economist at Zillow, said the broader housing wealth picture remains supportive even as price declines gripped parts of the market. "Even as buyers struggled with rising costs, US housing wealth kept climbing," he said, noting that new construction created trillions in wealth that did not exist five years ago. "The bottom line is that we need more homes to solve our chronic affordability crisis."