Northeast & West Housing Boom: How Economic Shifts Since the 1980s Drove Home Prices Higher

Since the mid-1980s, home prices in the Northeast and West regions have surged compared to the Midwest and South. Several factors contributed to the sharp rise in housing prices in the Northeast during this period, including higher income levels and increased demand. Strong economic growth in cities like Boston, New York, and Philadelphia—driven by the finance, technology, and services sectors—played a major role. The booming financial sector in New York City, particularly on Wall Street, also fueled housing demand. Other factors included limited housing supply, low-interest rates, easy credit, and regional demand shifts. As deindustrialization affected the Midwest (the "Rust Belt"), businesses and individuals migrated to the Northeast, further boosting population growth and housing demand.

A similar trend occurred in the western U.S., where house prices surged due to population growth, migration, and the tech boom. The rapid expansion of the technology sector, particularly in Silicon Valley with companies like Apple, Microsoft, and Hewlett-Packard, created jobs and attracted a skilled workforce, driving up housing demand.