Recession-Proof Housing Markets in 2025 Why Some States Are Bucking the Trend

Amid chatter about a possible recession, housing markets in some states are showing remarkable resilience. In 2025, “recession-proof” housing markets are those that continue to see stable or even rising home prices despite high mortgage rates and economic headwinds. These markets defy the national cooling trend – Zillow projects U.S. home values will barely inch up about 0.6% this year as rising listings give buyers more bargaining power. Yet in certain states, low inventory and steady demand are keeping competition (and prices) robust. A recent analysis highlighted that a number of states are experiencing these protective conditions thanks to a "big shortage of inventory" fueling upward pressure. Let’s explore what makes a market “recession-proof” in 2025 and how conditions differ in New Jersey, Connecticut, Texas, and Florida.

New Jersey: Strong Demand Meets Scarce Supply in the Northeast

New Jersey’s housing market is proving surprisingly resilient. Home values here are rising faster than almost anywhere else in the country. In fact, New Jersey tied for the highest annual price appreciation in late 2024 – about +8.3% year-over-year. This impressive growth comes even as the broader U.S. market has cooled to a mid-single-digit pace.

What’s driving Jersey’s strength? A big factor is scarce inventory. Many New Jersey homeowners are locked into ultra-low 3% mortgage rates from prior years and are reluctant to sell, so few new listings are hitting the market. Even though the number of homes for sale nationwide is up from last year, it’s still well below normal levels. In New Jersey, this means buyers have limited options, and competition remains stiff for any reasonably priced listing.

Another driver is New Jersey’s enduring buyer demand, especially from those priced out of New York City. Throughout 2023-24, many city dwellers and renters looked to suburban New Jersey for more space or affordability. That trend hasn’t vanished. As a result, North Jersey communities near NYC continue to see solid interest. With job markets recovering and NYC commuters returning, New Jersey homes are still in demand. Robust buyer competition and few homes for sale create a situation where sellers hold the upper hand, making New Jersey’s market feel particularly insulated from recessionary trends.

Connecticut: An Unexpected Comeback Star

Connecticut’s housing market has also turned into one of the nation’s breakout performers. Long considered sluggish (prices in CT stayed flat for years pre-pandemic), it is now sharing the top spot with New Jersey – posting about +8.3% yearly home price growth by late 2024. In other words, Connecticut home values are rising at nearly 15 times the national forecast rate for 2025.

Much like New Jersey, Connecticut benefited from urban out-migration during the pandemic. Remote workers from New York and Boston snapped up homes in Connecticut’s suburbs and quaint towns, driving up demand. Inventory was slow to catch up since new construction in Connecticut has been limited. Even now, listings remain scarce and buyers are competing for the few available homes.

This dynamic is evident in Hartford, CT’s capital, which currently ranks as one of the strongest seller’s markets in the country. Local data shows annual price gains around +5.6% in the Hartford metro area, outpacing most regions. Homes in Connecticut tend to sit on the market for less time and attract multiple offers, indicating that buyer demand hasn’t faded. Additionally, many buyers in Connecticut are repeat or move-up buyers with substantial equity, helping keep sales moving and prices climbing even as first-time buyers elsewhere struggle.

In essence, Connecticut’s housing market has the hallmarks of “recession-proof”: high demand, low supply, and buyers with the means to transact. Barring a major economic shock, CT home values look poised to hold firm or keep rising through 2025.

Texas: Cooling Off but Far From Crashing

Texas was a poster child for the pandemic housing boom – and now it’s a case study in a market seeking equilibrium. Over the past year, Texas housing has cooled from a frenzied boil to a gentle simmer. Unlike New Jersey or Connecticut, home prices in Texas aren’t skyrocketing right now, but they’re not collapsing either. By the end of 2024, the West South Central region (which includes Texas) saw only about a +2.3% yearly price increase, the smallest regional uptick in the U.S. In some Texan cities, prices even dipped a bit after the huge run-up of 2020-2022. For instance, Austin experienced a massive surge during the boom, but has since given back roughly 3.8% year-over-year, while San Antonio saw a modest decline of around 2%. These modest declines reflect a healthy correction of overheated prices rather than a crash.

What keeps Texas somewhat “recession-proof”? Relentless population and job growth are key factors. People continue moving to Texas for its affordability, job opportunities, and lifestyle. That provides a steady stream of buyers. At the same time, Texas has an advantage that Northeast markets lack: the ability to build homes quickly. During the recent slowdown, while builders pulled back a bit, new construction never stopped. In early 2025, new home sales jumped as buyers took advantage of price adjustments and incentives on new builds. This gradual increase in housing supply has eased pressure, balancing supply and demand.

Although Texas has shifted from a frenzied seller’s market to a more balanced one, demand still largely meets supply. Homes priced right are selling steadily, even if without the intense bidding wars of the past. This balance may make Texas one of the steadier markets if a recession hits – neither bubbly nor busting, but holding value.

Florida: Popular Destination Adjusts to a New Normal

Florida’s housing market has been a headline-grabber in recent years – first for eye-popping price jumps and now for its gradual deceleration. During the pandemic, Florida saw an influx of buyers drawn by its climate, space, and favorable tax policies, leading to surges in home values in many metros by as much as 30-40% over a short span. By 2025, that explosive growth has cooled, yet Florida remains fundamentally strong.

Statewide, home prices are roughly flat or modestly up year-over-year, despite the slowdown. Some red-hot markets, such as Tampa, have seen slight declines – around 3.6% – while markets like Miami and Jacksonville have experienced modest adjustments. These areas are gradually shifting toward buyer's market conditions, offering less intense competition and more negotiating power for buyers. However, other parts of Florida, like Orlando and Fort Lauderdale, are holding steady, maintaining a delicate balance between buyer interest and rising inventory.

Notably, buyer demand in Florida remains high by historical standards. The state continues to attract new residents, especially from the Northeast, which bolsters a constant pool of potential buyers. This out-of-state interest has helped keep prices relatively stable despite a broader cooling trend in the market. For buyers, this means a bit more leverage compared to the pandemic boom, and for sellers, pricing correctly has become even more important. Overall, Florida is transitioning from an era of rapid price escalation to sustainable, moderate growth.

What “Recession-Proof” Really Means in Housing

It’s important to note that “recession-proof” doesn’t mean prices will never dip – it means that a market is well-insulated from severe downturns. New Jersey and Connecticut continue to see healthy price gains, supported by strong local economies and limited housing stock. Texas and Florida, meanwhile, offer stability through steady demand and balanced supply.

Here’s a quick comparison:

State	Home Value Change (YoY)	Inventory Situation	Buyer Demand & Competition
New Jersey	+8.3% (late 2024)	Very tight supply; few sellers	High competition – strong seller’s market
Connecticut	+8.3% (late 2024)	Very tight supply; few sellers	High competition – strong seller’s market
Texas	~+2–3% (late 2024)	Improving supply; new builds	Moderate competition – balanced market
Florida	~0% to +5% (varies by metro)	Increasing supply; more listings	Steady demand with some buyer’s market tendencies

New Jersey and Connecticut stand out with continued price appreciation, driven by high demand and limited supply. Texas and Florida show market stability, with steady population growth and new housing developments supporting value. Mortgage rates and affordability remain challenges nationwide, but the outlook suggests rates will stabilize, providing some certainty for both buyers and sellers.

Bottom line: A “recession-proof” housing market in 2025 is characterized by strong fundamentals – high demand, low supply, and the ability to withstand affordability challenges. Whether you’re looking to buy, invest, or hold, these states are showing that even in turbulent economic times, their housing markets are positioned to maintain value. While no market is completely immune to economic shocks, these regions have built-in strengths that offer a cushion against recessionary pressures.