The Sunbelt Housing Correction & Confusion
The Sunbelt is in correction.
And yet…
You’re still seeing headlines about people moving to Florida.
You’re still seeing U-Haul reports ranking Sunbelt states as “top growth markets.”
You’re still hearing that the market is strong.
So what’s actually happening?
Because if migration is strong… why are:
Builders slashing prices?
New home inventory stacking to 2006 levels?
Short sales rising?
Foreclosures climbing?
Prices falling across Florida, Texas, and other Sunbelt markets?
Let’s break it down.
The Migration Narrative Is Misleading
The most common data cited right now is U-Haul’s one-way truck rental report.
But one-way truck rentals are not net migration.
They track behavior. They do not confirm:
Household formation
Home purchases
Permanent relocation
As I explained in the video, U-Haul shows Florida ranked #2 in growth with 50% in-migration and 49% out-migration. That’s basically flat.
More importantly?
It doesn’t show the collapse in net migration.
When you look at actual domestic net migration:
Florida peaked at ~310,000 net migrants during the boom.
It has now fallen to roughly 22,000.
That’s a 93% collapse from peak levels
That’s not a slowdown. That’s a demand vacuum. And it gets worse.
International immigration — a major source of Florida cash buyers — is down roughly 70%.
Put those together and you have:
The wealthy demand that fueled 2020–2022 is gone.
2. Builders Built for a Demand That No Longer Exists
From 2020 to 2022, we effectively pulled five years of demand into two.
Builders assumed that demand would continue.
It didn’t. Now?
New construction inventory in the Southern Census region is above 2006 bubble levels. Let that sink in.
We have more new homes for sale than during the last housing bubble.
That’s why:
Builders are offering massive incentives.
Rate buydowns into the 3% range.
Price cuts of $100,000+ in some communities.
In 2022, some builders were selling at $500,000.
Now similar product is trading closer to $385,000–$400,000
The gap between new and existing sales is being artificially supported by incentives. But over time? They trend together.
3. 44% More Sellers Than Buyers
This is one of the widest seller-to-buyer gaps on record.
There are now 44% more home sellers than buyers
And the gap is widening.
That’s what happens when:
Affordability collapses
Migration falls
Wages don’t keep up
Speculative demand dries up
The math simply doesn’t work. If you need $110,000 in income to buy but you make $85,000, something has to give. And historically? Prices adjust.
4. Negative Equity, Short Sales, Foreclosures
This is where things start to compound.
Negative equity is rising across major Sunbelt metros.
Short sales are increasing weekly.
Florida now has the highest foreclosure rate in the country.
We expect Q2 and Q3 to show significant increases in foreclosure activity.
Florida is especially vulnerable because:
Higher investor share
Heavy second-home exposure
Insurance and HOA cost spikes
High rate sensitivity
Extreme dependence on migration
When migration collapses in a migration-dependent state? The unwind can happen.
5. The Stock Market Is Quietly Propping Things Up
The median homebuyer age is now ~61 years old.
That demographic:
Owns significant stock market assets
Owns significant home equity
Is less rate-sensitive
The stock market staying elevated is one of the key reasons we haven’t seen a sharper correction yet. If equities crack? Housing liquidity likely follows, especially in Florida.
6. The One “Bright Spot”: Rates at 5.99%
I would like to end on a positive note. Mortgage rates recently dropped to 5.99% from 6.99% over the last year.
That 1% decline:
Increases purchasing power ~10%
Potentially brings ~1.5 million buyers back into the market
But here’s the issue. Rates aren’t falling because everything is strong.
They’re falling because:
The employment market is softening
Economic risks are increasing
AI disruption concerns are rising
Falling rates during economic weakness can create short-term activity — but not long-term stability. If you’re buying at record high prices just because rates dipped? You could still get burned.
What to do?
Negotiate. Negotiate price. Negotiate incentives. Negotiate terms. You have leverage.
Drop your city and what you’re seeing on the ground. Would love to hear from you. Jon@movewithmomentum.com
