The hottest housing market in the US is a hardscrabble city that’s been shrinking for 75 years

Hartford, Connecticut, has emerged as the hottest housing market in the U.S., according to Zillow’s 2026 hot housing market report. The city, known as 'The Insurance City,' saw typical home values reach $381,760 in October 2025, with 66% of homes selling above asking price. Demand remains exceptionally high, as there are 63% fewer homes for sale than before the pandemic, pushing up prices further. Only 16.5% of listings experienced price cuts in 2025, while home values grew by 4.3% and are forecast to rise another 3.9% in 2026. Hartford’s housing market recovery is surprising given its long-term population decline. The city’s population peaked in 1950 at 172,000 but has since dropped to 122,000, a loss of 50,000 residents over 75 years. Major insurers like Travelers, Aetna, and Cigna relocated headquarters away from Hartford, contributing to its economic struggles. The shortage of homes extends beyond Hartford, with other Northeast cities like Buffalo, New York, and New York City also experiencing high demand. Buffalo saw 65% of homes selling above asking price in 2025, with typical values at $277,499, while the New York metro area had 49% of homes selling above asking at an average price of $704,284. Both markets also report fewer homes available than before the pandemic, with New York’s inventory down by nearly half over five years. Zillow’s report highlights a broader trend of limited housing supply in the Northeast, contrasting with faster population growth in states like Texas, Florida, and the Carolinas. The top 10 competitive housing markets include three Northeast cities, two in California, one in the South, and one in the Midwest. The data underscores a growing mismatch between demand and supply in key U.S. regions, driving up home values and competition.