Reid and Houghton announced the pregnancy last week, a month after they got engaged during a live TV interview.
Price and Reid had repeatedly spoken of plans to have a child together during their marriage and Price also said that she would consider adoption if they were not able to conceive.
"She went absolutely crazy, ranting that Chantelle was ruining her life and started throwing things around the house," a supposed friend of Price told Closer about the glamour model's reaction to the news.
"She's at an all-time low. She can't believe Alex didn't tell her before it came out in public. She's incredibly jealous.
"She doesn't want Alex back, but she can't cope with the fact he's moved on, in love and having a baby - all the things she wants."
The reported insider added that Price could slow down the process of divorce from Reid because she is so angry about the news.
"I call the shots here, so I won't divorce him now," she is alleged to have told friends. "We'll see how they like that."
In September, Price confirmed that she and Reid are still married and added that she is not rushing to formally divorce.
"I'm still married actually, and I'm in no rush to get divorced because I'm in no rush to get married," she told ITV's Daybreak.
"Divorces take for ages, they cost me a lot of money to get divorced for the obvious reasons."
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Another rumoured source added to the magazine: "Katie feels physically sick at the thought of any potential divorce payouts going on this baby.
"It's like she's actually scared when she thinks about dealing with the divorce.
"When she and Pete were divorcing, she had Alex to occupy her. But now she's single again and she can't stand it."
Reid recently claimed that he was "really depressed" towards the end of his marriage to Price.
Houghton was alleged to have called Price "a transvestite, a bitch and slag" in conversation with friends last month.
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