Where Are People Shopping for Homes Now That Mortgage Rates Have Fallen?
Not in the South, Nor out West.
For the past year, these huge chunks of the country have been consistently left off the Realtor.com rankings of the Hottest Housing Markets, pushed aside by places such as Manchester, NH (which just ranked No. 1 for the 30th time in seven years and the ninth month in a row).
Why aren’t homebuyers flocking to these sunnier, warmer climes?
In the case of the South, it comes down to supply and demand: This region of the country has seen housing stock boom over the past year as buyer demand waned.
"And you can blame high home prices for the West’s absence from these rankings," explains Hannah Jones, Realtor.com senior economic research analyst.
Where are America’s hottest real estate markets located?
With Manchester leading the way, the Northeast and the Midwest boast 10 markets each on the list.
"The Midwest and Northeast have reigned supreme as homes to most of the country’s hottest markets since mid-2022 when mortgage rates picked up steam," says Jones.
Manchester: The Hottest Market
Manchester touts a trifecta of features that make it attractive to homebuyers: This small Northeastern city is an hour from a large metro (Boston); it boasts a relatively affordable median home price of $563,000 ($277,000 lower than Beantown’s $840,000); and it’s in New Hampshire, which doesn’t have any state income and sales taxes.
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The 3 U.S. Cities Tied for Second Place
Three cities ranked No. 2 on our top 20 list: Concord, NH; Rockford, IL; and Springfield, MA.
Each of these cities had a different hotness factor going for it that made for a three-way tie.
Prices Climb in the Top 20 Markets
The hotter a market gets, the more home prices rise, with list prices climbing in 15 of the 20 hottest markets.
Homes in the Hottest Markets are Disappearing
Those looking to scoop up a home in a hot market should act quickly.
Conclusion
With housing affordability finally starting to improve with falling mortgage rates, this could start to shake up buyer demand — as well as which markets remain hot.
"Many less-hot markets across the country have seen a significant buildup in housing inventory, which can absorb an uptick in demand without much upward price pressure," adds Jones.
Frequently Asked Questions
Q: What are the hottest real estate markets in the United States?
A: The top 20 markets include Manchester, NH; Concord, NH; Rockford, IL; and Springfield, MA, among others.
Q: Why are homebuyers not flocking to the South and West?
A: The South is experiencing a housing stock boom, while the West is facing high home prices, making it difficult for buyers to compete.
Q: How do home prices change in the hottest markets?
A: Home prices rise in the hottest markets, with list prices climbing an average of 3.6% in September, compared to a 1% year-over-year decline nationally.
