Moody’s Analytics has released a detailed analysis of regional housing markets across the United States, emphasizing the stark differences in price trends, demand, and housing supply. According to the report, while some regions are experiencing rapid home price growth and tight inventory, others are facing stagnant or declining values due to economic pressures and shifting population trends.
The firm’s data sheds light on the broader story of housing in the U.S.—one that is not uniform, but shaped by local economic conditions, employment trends, and migration patterns. These variations have made some markets attractive to investors and homeowners, while others remain under pressure.
Explore more about the U.S. housing trends here
Markets With Rising Home Prices
Moody’s identifies several metropolitan areas where housing demand continues to outpace supply, leading to strong price appreciation. These include:
Miami, Florida: Home prices have surged as out-of-state buyers and international investors continue to target South Florida. The region benefits from no state income tax and a booming luxury housing sector.
Austin, Texas: Despite recent moderation, Austin remains one of the fastest-growing housing markets, driven by tech industry expansion and strong inward migration.
Charlotte, North Carolina: Charlotte has experienced double-digit home price growth over the past year, driven by job opportunities and affordability relative to larger metro areas.
According to Moody’s Chief Economist Mark Zandi, “In many southern and southwestern cities, the combination of job growth, lower taxes, and appealing climates has driven sustained housing demand, pushing prices higher despite national headwinds.”
Cooling or Declining Markets
On the other end of the spectrum, some cities are witnessing slower growth—or even price declines.
San Francisco, California: The tech slowdown, high cost of living, and rising mortgage rates have led to decreased demand and falling home prices.
Seattle, Washington: Once one of the hottest housing markets in the country, Seattle has cooled due to higher interest rates and reduced remote work flexibility.
Chicago, Illinois: Chicago’s housing market remains sluggish, with modest growth rates and concerns around property taxes and urban crime weighing on buyer sentiment.
Moody’s attributes the decline in these regions to a combination of affordability challenges, outbound migration, and slowing employment growth.
Read full report from Moody’s here
The Role of Mortgage Rates and Affordability
Moody’s notes that mortgage interest rates continue to be a significant factor influencing regional housing variations. With 30-year fixed mortgage rates hovering between 6.5% and 7%, affordability remains a major challenge for first-time homebuyers, particularly in already expensive markets.
In cities with higher average incomes and more affordable housing options—such as Raleigh, NC, and Tampa, FL—buyers are still managing to enter the market. In contrast, places like Los Angeles and New York City are seeing buyer fatigue due to the high cost of borrowing layered on top of already steep home prices.
A senior housing analyst at Moody’s explained, “Affordability has become a regional filter. Where incomes are rising and housing supply is adequate, markets remain active. In contrast, where affordability is strained, demand is weakening.”
Construction and Inventory Shortages
One of the driving factors in regional disparities is the uneven pace of new construction. Moody’s reports that states like Texas, Florida, and the Carolinas have seen robust homebuilding activity, helping to moderate price pressures.
In contrast, many northeastern and coastal states continue to face construction slowdowns due to zoning restrictions, labor shortages, and high material costs. The result is a mismatch between housing demand and supply.
For instance, Boston continues to struggle with low inventory, while cities in Arizona and Texas are seeing new developments keep pace with demand.
View housing supply insights from Moody’s here
Migration Patterns Reshaping Demand
Another factor behind regional variations is shifting migration patterns. Many Americans are moving from expensive, high-tax states to more affordable areas with lower costs of living and better work-life balance.
Moody’s data indicates strong inbound migration to states like Florida, Texas, and Tennessee. These trends have boosted local housing demand, especially in suburban and secondary metro areas.
At the same time, outbound migration from California, New York, and Illinois continues to drag on those states’ housing markets. Remote work has accelerated this trend, allowing people to relocate without sacrificing employment.
What It Means for Homebuyers and Investors
For homebuyers, Moody’s Analytics recommends paying close attention to local market dynamics rather than relying on national trends. Buyers in strong-performing regions may face bidding wars and rapid price growth, while those in cooler markets might find better negotiating leverage.
For real estate investors, the regional variations offer both opportunities and risks. Markets with growing populations, strong job bases, and new construction are expected to continue appreciating, while those facing economic stagnation or high inventory may underperform.
A key takeaway from the report: “Real estate is now a hyper-local game. Success depends on understanding the specifics of the market you’re entering.”
Final Outlook from Moody’s Analytics
Moody’s expects regional housing variations to persist through 2025, with affordability, interest rates, and job growth continuing to drive local market performance. While national home price growth may slow, certain metro areas are expected to remain resilient.
Investors and buyers are advised to monitor employment trends, population shifts, and local policy changes when assessing housing market potential.
Read Moody’s full housing market outlook here
Also Read – Zillow Predicts Home Prices Will Grow—but Slower in 2025
