In a surprising shift within the Connecticut housing market, small towns are experiencing stronger real estate sales growth than the state’s larger urban centers. According to recent data released by Berkshire Hathaway HomeServices New England Properties, as of June 11, 2025, towns with fewer than 40 new listings in May saw a 1.7% increase in sales—more than double the 0.7% uptick recorded in cities and larger municipalities.
Rural Revival Driven by Lifestyle Shifts
The surge in small-town sales reflects broader lifestyle changes fueled by remote work, affordability concerns, and growing preferences for quieter, less congested communities. Towns like Windsor and North Canaan have emerged as standouts in this trend. Windsor posted a remarkable 25% increase in residential transactions, while North Canaan saw its sales volume multiply fivefold—an extraordinary leap for a rural community.
In Litchfield County, Roxbury exemplifies the heightened demand in Connecticut’s countryside. The town now boasts median home listings above $1.3 million, drawing increasing attention from both in-state movers and out-of-state buyers. Online searches and inquiries about properties in the area have also risen sharply, indicating a growing appetite for spacious homes and picturesque settings.
“We’re seeing buyers who previously wouldn’t have considered these areas,” said a regional real estate agent. “They’re prioritizing space, privacy, and lifestyle over proximity to traditional job centers.”
Limited Inventory, Elevated Demand
Despite having fewer new listings than urban markets—up just 4.2% in small towns compared to 6.2% in cities—the surge in buyer interest has kept the market active and competitive. Limited housing supply in these areas hasn’t dampened the pace of sales, and in some cases, it’s fueled bidding wars and rising prices.
Real estate professionals suggest that this imbalance between supply and demand could continue supporting price growth in small towns through the summer. “It’s a classic case of high demand meeting constrained supply,” one analyst noted. “Unless there’s a significant influx of new construction, this dynamic could persist.”
Eastern Connecticut’s Mixed Performance
While western and central Connecticut towns are thriving, some communities in the eastern part of the state have seen more muted activity. However, exceptions exist—particularly in Stonington and Groton, where employment expansions at General Dynamics Electric Boat are stimulating local housing demand.
The defense contractor’s hiring surge, tied to increased submarine production, has boosted housing needs for new employees and contractors. Local officials say this industrial growth is playing a key role in reshaping real estate patterns in what was previously considered a more stagnant part of the state.
Broader Market Headwinds and Legislative Uncertainty
Zooming out, Connecticut’s real estate market still faces challenges tied to national economic conditions. Despite the localized booms in small towns, total home sales remain below pre-pandemic levels. This is largely due to a 64% increase in home prices since 2020 and persistently high mortgage rates, which continue to limit affordability for many potential buyers.
To address inventory shortages and affordability constraints, state lawmakers have introduced a housing bill aimed at encouraging new construction, particularly in underserved areas. The legislation includes incentives for multi-family housing development and streamlining of local zoning approvals. The bill is currently awaiting action from Governor Ned Lamont, whose decision could significantly influence the trajectory of the housing market over the coming year.
Looking Ahead
Connecticut’s real estate landscape is undergoing a transformation that challenges longstanding assumptions about urban dominance. The strong performance of smaller towns underscores how shifting preferences, workplace flexibility, and localized economic trends are redefining where people choose to live.
If current patterns hold, real estate investment and development could increasingly pivot toward areas once considered peripheral. However, the future impact of state-level policy and macroeconomic conditions—particularly interest rates and inflation—will be crucial in determining whether this rural revival becomes a long-term trend or a temporary reaction to an overheated urban market.