Key Insights at a Glance
- Once frenzied, pandemic-driven housing markets—especially across the Sun Belt—are hitting the brakes fast, as revealed by Bankrate’s 2025 Housing Heat Index.
- Florida dominates the chill zone this year, with Cape Coral-Fort Myers, Punta Gorda, North Port-Sarasota-Bradenton, and Naples-Marco Island ranking among the five coldest metros.
- The hottest housing battlegrounds in 2025 cluster around the North and Rust Belt, spotlighting places like New Haven, CT, Rockford, IL, and York-Hanover, PA.
Sun Belt’s Sizzle Cooldown vs. Rust Belt’s Rising Spark
Markets that were once on fire during the pandemic—especially those sun-drenched Sun Belt cities—are now losing steam.
This year, a tectonic shift is underway, with the Rust Belt and New England metros grabbing the spotlight, fueled by sharp demand and shrinking housing stock, according to Bankrate’s latest index. Hotspots such as New Haven, CT; Rockford, IL; York-Hanover, PA; and Syracuse, NY are seeing a surge reminiscent of a fresh blaze in demand.
In these red-hot zones, home prices have jumped by no less than 9% within the last year, making such rapid gains increasingly standard rather than exceptional.
Experts argue that the cooling isn’t bad news—it signals these regions are outpacing others in new construction, easing the fatigue buyers have felt from sky-high prices and scarce options.
Bankrate’s Housing Heat Index cleverly reveals who’s calling the shots this year—sellers or buyers—by evaluating 212 metropolitan statistical areas (MSAs) and the largest 50 MSAs by population. Metrics include price appreciation, inventory availability, market cutthroat-ness, population influx, and employment vitality.
“Southern states are seeing price cooldowns, especially Florida and Texas, mainly because they’ve built more than New England,” notes Lawrence Yun, chief economist at the National Association of Realtors. “Supply really drives this.”
Rust Belt and Northeast: The New Epicenters of Housing Heat
Dominating Bankrate’s 2025 Housing Heat Index are Northeastern and Rust Belt metros, which claim 11 of the top 20 spots. Yun credits this momentum to geography for the Northeast and affordability for Rust Belt locales.
“The Midwest’s affordability is a magnet,” Yun explains. “The Northeast struggles with supply shortages. Hybrid or gradual office returns might be pumping up demand where homes are scarce.”
The Five Most Sizzling Metros, Across All Sizes:
- New Haven-Milford, CT: Rocketing from 82nd place in 2023 to the top in 2025, New Haven leads in home value gains and suffers from a low inventory crunch—ranking 15th for listings per 1,000 residents. However, employment and population growth lag behind, with positions at 91st and 126th respectively.
- Rockford, IL: Jumping from near the bottom (196th in 2023) to 2nd place now, Rockford’s market toughness and appreciation rates have skyrocketed in just two years.
- Norwich-New London, CT: Another Connecticut contender, this metro soared from 54th to 3rd place. It’s in the top five for yearly price growth and boasts a swiftly vanishing inventory.
- Charleston-North Charleston, SC: The lone Sun Belt representative in the top five, Charleston scores well in job growth (9th) and population influx (21st), though its price appreciation (41st) is more moderate.
- York-Hanover, PA: Climbing from 79th to 5th, York-Hanover has seen significant year-over-year price hikes and a shrinking pool of available homes.
Four of these five hottest markets sport median home prices below the national midpoint of $441,000 (May 2025, Redfin). Rockford stands as the bargain, with a median list price near $205,000, while Charleston tops out at about $455,000.
Sun Belt’s Chill Zone: Cooling After The Pandemic Surge
Having swelled with population and employment, the Sun Belt’s housing frenzy is now tempering. While jobs and people still trickle in, inventory grows faster, demand eases, and buyers regain leverage.
This recent cool-down stems from a catch-up in home building, after frenzied pandemic buying pushed prices to new heights, spurring a wave of new construction aimed at calming overheated markets.
“The South has bounced back inventory-wise because they built aggressively,” says Jake Krimmel, senior economist at Realtor.com. “In contrast, the Northeast and Rust Belt—with preexisting shortages—have only seen these gaps widen.”
Nationally, demand drifts downward amid eye-watering prices, leaving more homes lingering on the market. Yet in cooling markets, prices are nudging slightly downward, hinting at a tense standoff between hesitant buyers and reluctant sellers.
“We’re in a holding pattern – more listings but prices barely budge,” Krimmel observes. “Someone will have to blink for deals to move.”
Chillest Housing Pockets Right Now:
- Cape Coral-Fort Myers, FL: This metro flipped from 3rd hottest in 2023 to dead last in 2025, plagued by minimal price appreciation and long times on market.
- Punta Gorda, FL: Cooling sharply post-pandemic peaks, with an abundance of inventory relative to population.
- North Port-Sarasota-Bradenton, FL: Once a blazing hotspot (4th in 2023), it now ranks near last in appreciation and listings metrics.
- Shreveport-Bossier City, LA: This Southeastern market languishes below average almost across the board, with the exception of moderate job growth.
- Naples-Marco Island, FL: Once sizzling, this market now ranks near the bottom, showing slowed price gains and scarce activity.
Despite the current lull, Yun is bullish on Sun Belt recovery. He highlights robust job-driven migration into Texas and Florida, hinting any pricing slump is likely temporary.
“Job migration remains sturdy,” Yun explains. “Right now there’s an oversupply linked to steep interest rates. Once those rates drop, the surge could flip Southern states back into shortage territory.”
National Rankings: The Hottest & Coldest Major Markets
Top 5 Large Metros Heating Up
- Hartford-East Hartford-Middletown, CT: Topping home price hikes and boasting low inventory, Hartford combines a brisk sales pace with solid employment.
- Philadelphia-Camden-Wilmington, PA-NJ-DE-MD: Affordable yet competitive, Philadelphia ranks high for appreciation and rapid turnover amid tight listings.
- Columbus, OH: Climbing since 2023, Columbus shines with strong home price growth, job market vigor, and population upticks.
- New York-Newark-Jersey City, NY-NJ-PA: The Big Apple climbs into the top ranks for price appreciation, with decent inventory and job growth adding fuel.
- Detroit-Warren-Dearborn, MI: Once cold, Detroit is heating up fast, landing 4th for annual home price gains among big metros.
Bottom 5 Large Metros Cooling Off
- New Orleans-Metairie, LA: Continuing its downward trend, New Orleans suffers from dismal home price growth and slow sales cycles.
- Memphis, TN-MS-AR: Struggling in all categories except paltry job growth, Memphis remains firmly in the cool zone.
- San Francisco-Oakland-Berkeley, CA: Despite sky-high prices, home appreciation lags, though a tight inventory keeps competition alive.
- Denver-Aurora-Lakewood, CO: After cooling for two years, Denver slides near the bottom for both price gains and job growth.
- Tampa-St. Petersburg-Clearwater, FL: From top five heats in 2023 to the bottom five in 2025—a stark reversal despite steady population and job growth.
Smart Moves for Buyers and Sellers Amid These Market Swings
The housing landscape is shifting gears, but it’s not collapsing. Consider it a recalibration, particularly in those Sun Belt hotspots that saw meteoric 40%+ price jumps during the pandemic era, according to experts.
“We always knew that kind of growth wasn’t sustainable,” says Mark Middleton, a seasoned agent in Tampa Bay. “Florida was undervalued for years, making it a magnet. The frenzy echoes what California saw two decades ago.”
Housing is local, despite national trends. Where you live, the price segment, and home type matter. Whether on the buy or sell side, tapping into a local expert who knows the market inside and out is the key to winning strategies.
“Without solid info, neither buyers nor sellers can play their cards right,” Middleton warns.
Tips for Buyers in a Cooling Market
- Get pre-approved: Demonstrating financial readiness to sellers puts you ahead of the pack—offering clarity on budget and seriousness.
- Take a breather: Homes linger longer now, giving you the luxury of time to consider options thoughtfully rather than rush.
- Don’t skip inspections: Pandemic-era buyer frenzy pushed some to waive due diligence, but getting thorough inspections is vital in today’s calmer market.
- Know your timing and turf: Sellers in still-hot zones might strike while the iron’s hot; buyers in cooling markets benefit hugely from expert local guidance on when and how to strike.
Behind the Numbers: Understanding the Housing Heat Index Methodology
Bankrate’s Heating Index is a composite score derived from careful analysis of 212 metro areas, factoring in:
- One-year home price appreciation (40%) — Changes in house prices based on the FHFA Metropolitan Area House Price Index (Q1 2025).
- One-year job growth (15%) — Non-farm employment changes per U.S. Bureau of Labor Statistics (March 2024–2025).
- Population growth (15%) — Annual resident population estimates from U.S. Census data (2023-2024).
- Active residential listings per 1,000 people (12.5%) — Number of active for-sale listings relative to population, measured via Realtor.com (May 2025).
- Median days on market (12.5%) — How long homes typically stay listed before selling or removal, based on Realtor.com data (May 2025).
- Unemployment rate (5%) — Latest metro area unemployment figures from the Bureau of Labor Statistics (April 2025).