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Sunbelt Cities Poised for Home Price Surge in 2026

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  Published in House and Home on Monday, January 5th 2026 at 17:47 GMT by CNBC

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Sunbelt Surge Continues: These US Cities Are Projected To See Home Prices Soar in 2026

The housing market remains a complex landscape, defying easy predictions even as interest rates fluctuate and economic anxieties linger. While many anticipated a nationwide price correction after the rapid appreciation of recent years, that hasn’t materialized completely. Instead, a persistent regional divide is emerging, with certain cities poised for significant home price growth in 2026. According to a new analysis by Zillow, compiled and reported by CNBC, the Sun Belt continues its reign as the epicenter of this upward trend, though some surprising pockets of growth are also appearing.

The report, based on Zillow’s proprietary algorithms that factor in economic conditions, demographic trends, home affordability, and historical data, identifies cities where prices are projected to increase between 4% and 7% by late 2026. This is a considerable forecast, especially considering the current environment of elevated mortgage rates which typically dampen demand. The underlying reasons for this continued growth are multifaceted, but boil down to strong population influx, limited housing supply, and sustained economic activity in these areas.

Leading the Pack: Florida Dominates the Top Spots

Unsurprisingly, Florida holds a commanding presence on the list. Orlando, topping the chart with an expected price increase of 7%, is driven by its booming tourism industry, relatively affordable living compared to other major metros, and continued migration from higher-cost states. The area’s job market, particularly in hospitality and healthcare, remains robust, attracting new residents. The CNBC article highlights that Orlando's median home price currently sits around $420,000, indicating a significant potential for further appreciation.

Following closely behind is Tampa, also in Florida, with an anticipated 6.8% increase. Tampa’s appeal lies in its diverse economy (moving beyond traditional tourism), beautiful climate, and relatively lower cost of living compared to coastal cities like Miami. The influx of remote workers seeking a warmer climate has further fueled demand.

Miami itself isn't far behind, projected for a 6.7% increase. While the city’s luxury market has faced some headwinds recently (as discussed in related articles exploring the impact of international buyers), overall demand remains strong due to its continued attractiveness as a global hub and lifestyle destination. The article notes that Miami's housing affordability crisis is worsening, contributing to the upward pressure on prices.

Beyond Florida: Sunbelt Expansion & Unexpected Growth

While Florida dominates, the trend isn’t limited to the Sunshine State. Several cities in North Carolina are also expected to see substantial price increases. Raleigh (6.5%) and Charlotte (6.3%) benefit from strong job growth in the tech and financial sectors, respectively. These cities have become magnets for young professionals seeking career opportunities and a higher quality of life. The article points out that these areas are experiencing rapid population growth, straining housing supply and driving up prices.

Interestingly, Austin, Texas, once considered a guaranteed winner in the Sunbelt migration story, has seen some cooling. While still expected to see a 4.7% increase (placing it near the lower end of the projection range), this represents a significant slowdown compared to its explosive growth during the pandemic. Factors contributing to this moderation include overbuilding in certain segments of the market and affordability concerns that are pricing out some potential buyers.

Another surprising inclusion is Nashville, Tennessee, projected for a 5.9% increase. Nashville's popularity as an entertainment hub and relatively affordable cost of living have continued to attract new residents, though rising property taxes are becoming a concern for homeowners. The city’s healthcare industry also provides a stable economic foundation.

Factors Driving the Forecast & Potential Roadblocks

Zillow's analysis emphasizes that these projections aren’t guarantees. Several factors could derail or alter this trajectory. The most significant is, of course, mortgage rates. A substantial and sustained increase in rates would likely cool demand and dampen price growth across the board. Economic recession, while not currently anticipated to be severe, could also impact the housing market.

Furthermore, construction activity plays a crucial role. While new home construction has been increasing, it hasn't kept pace with population growth in many of these high-demand areas. This persistent supply shortage is a key driver of price appreciation. However, rising material costs and labor shortages continue to hamper building efforts.

Finally, affordability remains a critical issue. As prices rise, the pool of potential buyers shrinks, potentially slowing down the rate of appreciation. The CNBC article highlights that even with projected increases, these cities are still relatively more affordable than coastal giants like New York or San Francisco, but the gap is closing. The report also acknowledges that demographic shifts, such as changes in household formation rates and age distribution, could influence future demand.

Conclusion: A Regional Housing Market Story

The 2026 housing market forecast paints a picture of continued regional divergence. While some areas may experience cooling or stabilization, the Sun Belt – particularly Florida – is expected to remain a hotbed for home price appreciation. Potential buyers and sellers in these regions should carefully consider these projections alongside their individual financial circumstances and long-term goals. The ongoing interplay between population growth, limited supply, economic factors, and interest rates will continue to shape the housing landscape well into 2026.

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