Northeast and Midwest housing markets are the tightest heading into summer 2026

Soft housing markets with the greatest buyer leverage are concentrated in Southern and Mountain West regions. These areas included major pandemic boomtowns that saw large home price growth during the pandemic housing boom, pushing prices beyond local income levels. As domestic migration slowed and mortgage rates rose, markets such as Punta Gorda, Florida, and Austin faced pressure because local incomes had to support elevated prices. Additional cooling came from abundant new home supply in Sunbelt pipelines, where builders often reduce prices or offer affordability adjustments. Those incentives can also pull demand from resale homes. Northeast and Midwest markets had less reliance on pandemic migration and fewer new homes under construction, keeping inventory relatively tight and supporting price resilience into the 2026 summer market. Markets with inventory near 2019 levels saw weaker price growth, while markets with inventory far below 2019 levels saw more resilient growth.

"Many of the softest housing markets, where homebuyers have gained the most leverage over the past four years since the pandemic housing boom ended, are located in Southern and Mountain West regions. Many of those areas were home to the nation's top pandemic boomtowns, which experienced significant home price growth during the pandemic housing boom, stretching housing prices beyond local income levels. Once pandemic-fueled domestic migration slowed and mortgage rates spiked, markets like Punta Gorda, Florida, and Austin faced challenges as they had to rely on local incomes to sustain frothy home prices."

"The housing market softening in these areas was further accelerated by the abundance of new home supply in the pipeline across the Sunbelt. When and where needed, builders are often willing to reduce prices or make other affordability adjustments to maintain sales. These adjustments in the new-construction market also create a cooling effect on the resale market, as some buyers who might have opted for an existing home shift their focus to new homes where deals are available."

"In contrast, many Northeast and Midwest markets were less reliant on pandemic domestic migration and have less new-home construction in progress. With lower exposure to that migration pullback demand shock-and fewer homebuilders doing large incentives-active inventory in these Midwest and Northeast regions has remained relatively tight. That's still the case entering the 2026 summer housing market."

"Generally speaking, housing markets where inventory (i.e., active listings) has returned to pre-pandemic 2019 levels have experienced weaker home price growth (or outright declines) over the past 47 months. Conversely, housing markets where inventory remains far below pre-pandemic 2019 levels have, generally speaking, experienced more resilient home price growth over the past 47 months."

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