In Cape Coral, Florida, a three-bedroom house that sold for $410,000 in early 2023 might list for under $370,000 today. In Kansas City, Missouri, a comparable home that traded for $265,000 two years ago could fetch north of $285,000. Federal data released in early 2026 confirms what local agents in both metros have been seeing for months: these two mid-size cities now sit at opposite poles of the American housing market, and the gap between them is widening.
The numbers behind the split
The Federal Housing Finance Agency’s House Price Index for the fourth quarter of 2025 measured national home prices at 1.8 percent higher than a year earlier. The index uses a repeat-sales methodology, tracking the same properties over time through conforming-mortgage records from Fannie Mae and Freddie Mac, which filters out distortions caused by shifts in the mix of homes being sold.
Within the agency’s top 100 metro breakdown, Cape Coral-Fort Myers recorded a 9.1 percent annual decline in the Q4 snapshot, the steepest drop on the list. Broader index calculations that incorporate a slightly wider reporting window put the decline closer to 9.6 percent. Either way, the direction is unambiguous: Southwest Florida home values fell sharply. Kansas City topped the other end of the ranking at 8.6 percent annual growth. Most metros clustered far closer to the 1.8 percent national average, which makes these two outliers worth examining closely.
Why Cape Coral is falling
Cape Coral-Fort Myers was one of the pandemic era’s biggest winners. Remote workers flooded Southwest Florida between 2020 and 2022, pushing home prices up roughly 60 percent in barely two years. The correction now underway has several reinforcing drivers.
Property insurance is the most punishing. Florida’s homeowners insurance market has been in crisis for several years, with carriers leaving the state or imposing double-digit premium hikes. The Insurance Information Institute estimates that Florida’s average annual homeowners premium surpassed $6,000 by late 2025, roughly triple the national average. In Cape Coral, a canal-grid city with significant flood exposure, many owners also carry separate flood policies through the National Flood Insurance Program or private insurers, adding another layer of cost. Hurricane Ian, which devastated parts of Lee County in September 2022, accelerated carrier withdrawals and repriced risk across the region. For a prospective buyer, these carrying costs can add $500 or more per month on top of the mortgage, effectively shrinking the purchase price they can afford…