Regional Housing Market Disparities: What October 2025 Data Reveals Across America

The U.S. housing market enters 2026 displaying stark contrasts between thriving and struggling regions, according to comprehensive market analysis using Zillow’s most recent data from October 2025. Across the nation’s 50 states, single-family home values tell vastly different stories—some regions are experiencing robust appreciation while others face significant headwinds. For prospective buyers considering their next move, understanding these geographical variations has become essential.

Market Performance: Winners and Laggards

The landscape paints a picture of uneven recovery. Certain states have delivered impressive gains over the past two years, while others are grappling with declining values. New Jersey emerges as the strongest performer, with home values jumping 11.7% over two years, while Illinois leads in year-over-year momentum at 4.3% appreciation. Conversely, states like Texas and Arizona are struggling with negative trajectories—Texas saw values decline 2.7% over two years, while Arizona experienced a 2.0% downturn.

The Price Spectrum: From Most to Least Expensive

Hawaii continues to command the nation’s premium pricing, with average single-family homes valued at $959,688 in October 2025—reflecting both location desirability and supply constraints. On the opposite end, West Virginia offers the most affordable entry point at $169,206 average home value.

Mid-tier states reveal interesting patterns: California homes average $784,364, Massachusetts at $667,117, and Washington at $605,992. These coastal markets, while expensive, show mixed performance—California declined 2.0% year-over-year, while Massachusetts gained a modest 1.1%.

State-by-State Performance Summary

Strong Appreciation States (Dual-Year Gains Above 9%)

• New Jersey: $578,764 average | 11.7% two-year gain | 2.9% one-year gain
• New York: $483,605 average | 11.6% two-year gain | 4.0% one-year gain
• Connecticut: $453,495 average | 11.0% two-year gain | 3.8% one-year gain
• Rhode Island: $497,634 average | 10.3% two-year gain | 2.8% one-year gain
• Illinois: $285,028 average | 10.1% two-year gain | 4.3% one-year gain (strongest recent momentum)

Moderate Growth Markets (5-9% Two-Year Appreciation)

This tier includes Ohio (9.4% two-year), New Hampshire (9.2%), Wisconsin (9.2%), Indiana (7.4%), Michigan (7.6%), West Virginia (7.4%), Iowa (7.5%), and Kansas (7.8%). These regions demonstrate steady, consistent appreciation attractive to value-conscious buyers.

Stagnant or Declining Markets

Florida presents a cautionary tale, with values down 5.0% year-over-year and 4.4% over two years despite historical desirability. Texas similarly underperformed, declining 2.6% annually. Arizona, Colorado, and Vermont also reported negative two-year returns ranging from 1.3% to 2.2%.

Stable but Modest Performers

States like Alabama (2.0% two-year), Louisiana (-2.0% two-year), and Mississippi (1.5% two-year) represent markets with minimal volatility—suitable for those prioritizing stability over rapid appreciation.

Regional Patterns: What the Data Suggests

Northeastern resilience: States across the Northeast—New Jersey, New York, Connecticut, and Massachusetts—demonstrate consistent appreciation, with most posting double-digit two-year gains. This region’s stability stems from strong demand and limited housing supply.

Midwest momentum: Cities and states throughout the Illinois corridor and surrounding Midwest regions are experiencing renewed interest, with several posting 3-4% annual appreciation rates. Lower baseline prices make these markets attractive for first-time buyers.

Sunbelt slowdown: Previously booming regions like Florida and Texas have cooled considerably. Florida particularly stands out with five consecutive quarters of decline, suggesting market saturation after years of rapid in-migration.

Mountain West mixed results: Utah ($540,574 average, 3.4% two-year) shows stability, while Colorado and Vermont face headwinds despite high nominal prices.

Market Dynamics Moving Into 2026

The volatility persisting through the 2020s—driven by pandemic aftereffects, inflation pressures, and elevated mortgage rates—continues shaping regional outcomes. States with diversified economies, job growth, and reasonable inventory appear positioned for 2026, while regions that experienced rapid 2020-2022 appreciation face consolidation phases.

Buyers evaluating options should consider not just current prices but trajectory: Illinois housing market news continues showing positive momentum, while traditionally expensive coastal markets show mixed signals. The data suggests 2026 will reward selective geographic positioning over broad-market strategies.

Understanding these state-level variations provides the strategic foundation for informed purchase decisions in an increasingly fragmented national market.