In July 2025, Connecticut’s housing market remained highly competitive, driven by tight inventory levels and sustained demand across various regions of the state. Home prices remained elevated, a direct result of limited housing options, particularly in the lower price brackets. The lack of availability for homes, especially starter homes priced under $500,000, has been a significant challenge for prospective buyers, particularly first-time homebuyers seeking affordable options. Despite these constraints, home sales in the state increased modestly, rising 1.4% compared to July 2024 and showing a 2.8% increase year-to-date. These figures reflect a resilient market, where demand continues to outpace supply, particularly in key suburban areas.
Several towns and cities across Connecticut saw notable growth in home sales, with markets such as Milford, Waterbury, Southbury, and Windsor experiencing particularly strong activity. These areas have become increasingly attractive to a variety of buyers, from those seeking more affordable options outside of major cities to those drawn to the suburban lifestyle. The rising demand has been a driving force in the state’s housing market, but it has also highlighted the difficulty that many prospective homeowners face in securing properties due to the tight supply.
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Although there was a slight drop in the premium buyers were willing to pay over asking prices—falling from 3.3% in 2024 to 2.8% in 2025—certain areas of Connecticut have continued to see buyers offering substantial over-asking prices. West Hartford, for example, remains one of the most competitive markets in the state, with some buyers paying up to 11% more than the listing price. This level of competition, even in the face of slightly softer bidding wars, underscores the continued desirability of certain communities, particularly those close to major urban centers and with access to top-rated schools, parks, and other amenities.
A notable trend in Connecticut’s housing market has been the influx of New York City transplants. The appeal of suburban living, combined with the relatively lower price points compared to New York City, has led many families looking for more space and better schools to make the move to Connecticut. This demographic has significantly contributed to the demand in key markets throughout the state. The migration of these buyers, many of whom are looking for larger homes to accommodate growing families, has added further pressure to an already tight market. The ongoing shift toward suburban living, accelerated by the remote work trend, is expected to continue influencing Connecticut’s housing dynamics for the foreseeable future.
Despite the high demand and limited supply, experts are cautiously optimistic about potential improvements in affordability, particularly as Zillow and other real estate analysts forecast a potential easing in home prices. However, many prospective buyers may not experience significant relief this year. Tight inventory and sustained demand for desirable properties mean that the market is unlikely to see drastic price reductions in the short term. The forecasted improvements in affordability are more likely to be gradual, offering only modest relief to buyers struggling with high prices and limited options.
The competitive nature of Connecticut’s housing market also presents challenges for sellers, who may be holding out for optimal offers but face the risk of their properties sitting on the market if they overprice. Sellers must carefully assess local market conditions and adjust expectations accordingly to avoid prolonged listing times. Despite this, the broader trend of rising home prices and sustained buyer interest continues to favor sellers, especially in sought-after regions.
As Connecticut’s housing market moves forward into the latter part of 2025, experts predict that tight inventory and strong buyer demand will continue to shape the landscape. While modest increases in home sales are expected, especially in suburban towns, prospective buyers will likely remain faced with competitive conditions and limited housing options. As inventory remains scarce and demand persists, those looking to enter the market will need to be prepared for high competition and, in some cases, the potential for paying above asking prices. Connecticut’s housing market is expected to remain resilient, but the challenges of affordability and inventory will continue to be key issues for both buyers and sellers.
