A Sharp Divide – Feb. 2, 2026

In both the for-sale and rental sectors, there are clear winners and losers among U.S. housing markets

The U.S. housing market, both owned and rented, is fragmenting into “clear winners and losers” to an extent not seen since the 2008 financial crisis. That’s the top-line conclusion of the 2026 Landlord Exodus & Housing Stress Index, published by GigHz, a physician-led research and capital platform. The index combines Zillow housing and rent indices, state regulatory datasets, and proprietary landlord‑friendliness and affordability metrics. 

Four of the five markets most vulnerable to “crash risk”—based on a 0–10 score that combines price declines, rent weakness, seller desperation and days to pending sales—are tertiary cities in Florida (Punta Gorda, Cape Coral, North Port and Naples). All five are located in the Sunbelt, including Sevierville, TN.  

Thirty-two percent of U.S. metro areas are in year‑over‑year price decline, and 13 states remain below their 2022 peak, the report states. Florida, Texas, Arizona and California lead this correction. 

The report also finds that 76% of for-sale homes in Florida sell below list price, Colorado’s housing inventory has surged by about 176% since early 2022 and it takes 17.1 years to save for a 20% down payment on a home in Hawai’i. Interestingly, on a regional basis, New England appears to fare best in terms of seller price cuts, with all six states coming in at the lower end of the spectrum.  

On the rental side, market conditions are similarly fraught. Following a post-pandemic surge, “many states now experience negative or near‑zero rent growth despite still‑tight vacancy rates,” the report states. “The steepest decelerations occurred in states that saw huge surges during the pandemic (Florida, Arizona, Utah) and in heavily regulated markets where supply can’t adjust quickly (California, Washington). This pattern echoes the economic principle that supply constraints amplify volatility.” 

Even with slowing rent growth, the report finds that rent stress—defined as the percentage of household income spent on renting—has emerged as “the clearest signal of social and political pressure. The median U.S. renter spends 23% of household income on rent, but the burden exceeds 30% in many coastal states.” 

The report’s Landlord Friendliness Index suggests “a sharp divide between states that encourage housing investment and those that hinder it.” States such as Texas, Florida, Alabama and Indiana earn the maximum rating of 5 due to fast eviction timelines, no rent control and flexible deposit rules.

At the other end of the scale, California, New York, New Jersey, Massachusetts, Washington state and Washington, DC all rate 1 out of 5. This scoring reflects the impact of rent caps, “just cause” eviction laws, low deposit limits and lengthy court processes. 

Contrary to the intent behind the policymaking, the report finds that tenant‑friendly regulatory policies correlate with higher rent stress. The six least landlord‑friendly jurisdictions (rating 1) have an average rent stress of 21.0%, while the most landlord-friendly states (rating 5) average 18.3% rent stress, a 2.7-percentage-point gap. 

“Whether rent control causes higher burden or merely correlates with it, the affordability goal isn’t being achieved for low-income households in these markets,” according to the report. 

The report predicts that policy divergence will widen. “Pressure from rent‑burdened tenants in low‑friendliness states will lead to more rent caps and just‑cause eviction laws, further discouraging investment.” At the same time, affordability ceilings will constrain homebuyer demand, and conversely, supply expansion will concentrate in “friendly” states. “Builders and landlords respond to incentives; permit issuance is rising fastest in Texas, Florida and the Carolinas.” 

However, the lowest-risk investment bets right now aren’t in the Sunbelt but in the Rust Belt. The report’s “Safest Metros” list shows Rockford, IL; Erie, PA; Utica, NY; St. Joseph, MO; Janesville, WI; Canton, OH; Syracuse, NY; and Cleveland, OH all scoring 0/10—with rising home values, healthy rent growth, moderate seller discounts and fast sales. 

“We’re measuring the incentives embedded in state housing policy,” said Pouyan Golshani, MD, founder of GigHz. “Investors and landlords aren’t villains or heroes; they’re actors responding rationally to regulation, supply and affordability. If policymakers want different outcomes, they need to change the incentive structure.”