Top Housing Markets for 2024

As noted in our 2024 National Housing Forecast, at a national level, we expect that housing affordability begins to turn around as mortgage rates ease and home prices dip. Although nationwide, home sales are expected to edge just slightly higher, some markets across the country are projected to fare differently. Sales growth is the main propellant for top housing markets in 2024, with price growth also contributing, but generally to a lesser degree. Affordable markets in the Northeast and Midwest are joined by Southern California markets expected to rebound from significant sales declines in 2023.

Top Markets Could See Double-Digit Growth as Some Areas Rebound From Lows  

Eight metros are predicted to break double-digit sales growth in 2024, and they are predominantly expensive markets in the West which saw large sales declines in 2023. These metros are Oxnard, CA; Toledo, OH; Riverside, CA; Bakersfield, CA; Las Vegas, NV; San Diego, CA; Springfield, MA; and Sacramento, CA. However, with the exception of Toledo, all other metros are expected to see sales in 2024 at levels not only below the heightened activity of 2021-2022, but also below the pre-pandemic period of 2017-2019. In the case of the western metros, they are far below these levels (-20% to -35% below).

We ranked the largest 100 metros by their summed expected sale and price growth rates. The top 10 metropolitan areas which surfaced for 2024 are:

Some Markets Poised to Repeat Top Performance

Toledo, Grand Rapids and Worcester also appeared on our list of top 2023 predicted housing markets and are projected to finish in 4th, 11th, and 32nd place, respectively. While Worcester has slightly underperformed compared to initial expectations, it remains one of the hottest markets in the country, a feature which also helped it land at number 20 on the Fall 2023 Wall Street Journal/Realtor.com Emerging Housing Markets Index. Other top 10 markets which also made our October 2023 Hottest Housing Markets list included Rochester and Springfield. Notably, San Diego and Los Angeles made the top list of larger housing markets which were most-improved on our September 2023 Hottest Markets list.  

The top markets are ranked on the combination of expected sales and price growth in 2024. While the same, singular criterion is used to identify the top markets, the factors driving them to this position differ. Therefore, the top metro list can be split out into two groups driven by distinct trends:

1. Midwestern and Northeastern metropolitan areas that offer affordability in what has become a very expensive national housing market.
2. Western metros which took a big hit in 2023 and are expected to bounce back as interest rates fall over the year.

Affordability Propels Sales and Price Growth in Top Markets in the Midwest and Northeast 

The midwestern and northeastern metros share several common factors that make them attractive housing markets for buyers. These cities offer affordable housing options in comparison to larger urban centers, making homeownership more attainable. As of October 2023, all of these metro areas except for Worcester, MA, had median listing prices below the national average. While Worcester was 14.7% more expensive than the national median, it was 41.8% less expensive than the nearby Boston metro area where much of its out-of-town home searchers originate. 

Moreover, the top markets in the Midwest and Northeast also exhibit a degree of insulation from the impact of higher mortgage rates, largely due to a higher proportion of homeowners in these areas residing in housing units without a mortgage. The most recent American Community Survey indicates that, on average, 37.9% of homeowners in these top markets lived in homes without a mortgage, slightly surpassing the average share (36.7%) of the 100 largest metros. Notably, Toledo, OH, stood out with the highest share of homeowners who own their homes outright in the top 10 markets at 41.2%, followed by Rochester, NY, at 39.8%, and Grand Rapids, MI, at 38.4%.

These midwestern and northeastern metros also provide a high quality of life, with a variety of cultural amenities, recreational opportunities, and educational institutions. In fact, education and healthcare roles comprise more than a quarter of employment in Rochester, NY and Springfield, MA while Worcester, MA is just shy of this mark compared with less than 17% of jobs in this sector among the 100 largest markets. In Midwestern Toledo, OH and Grand Rapids, MI education and healthcare jobs are important, but manufacturing is much more prevalent than nationwide with 15% and 20% of employment in this industry, respectively, compared to 8% among the 100 largest metros.  With the exception of Toledo, unemployment in each of these areas is expected to meet or be lower at the end of 2024 than the national rate of 4.2%. Additionally, their central locations in their respective regions or proximity to major cities enhance convenience and access to broader opportunities, making these metro areas appealing choices for individuals and families seeking a well-rounded, cost-effective, and vibrant lifestyle.

Toledo, OH

Affordability reigns in Toledo. As of October 2023, Toledo’s median home listing price was 51.6% lower than the national median home price. The region offers a cost-effective housing market with a range of options, making it appealing to first-time buyers and families alike. Toledo is known for its welcoming and close-knit communities, where residents can enjoy a high quality of life without the high cost of living found in larger cities. Manufacturing, healthcare,  education, and government jobs are most prevalent. However, the Toledo metro area is expected to have a higher unemployment rate of 5.2% at the end of 2024 compared with 4.2%, nationally. Nonetheless, the city also offers cultural amenities, parks, and recreational activities, such as the Toledo Zoo and the scenic Maumee River, providing a well-rounded lifestyle for those seeking an affordable and engaging place to call home in the Midwest.

Rochester, NY

Affordability, a strong job market, and quality of life make Rochester an enticing market for home hunters in 2024. The region offers a cost-effective housing market with a variety of housing options, making it an ideal choice for both first-time buyers and families. As of October 2023, its median listing price was 41.2% below the national median. Rochester boasts a diverse economy, with opportunities in high-knowledge industries like healthcare, education, government, and manufacturing, along with a thriving arts and cultural scene. Its unemployment rate is projected to be 3.6% at the end of 2024, lower than the national expected rate of 4.2%. Residents can enjoy a high quality of life with numerous parks, recreational activities, and access to the stunning Finger Lakes region, known for its natural beauty. The area is also home to renowned educational institutions and a sense of community that emphasizes work-life balance, making Rochester an appealing destination for those seeking a balanced, affordable, and culturally rich lifestyle.

Springfield, MA

The Springfield, MA metro area is an attractive place for homebuyers for several reasons. It offers a more affordable housing market compared to larger nearby cities like Boston, making it an appealing choice for those looking for cost-effective homeownership. The median list price in Springfield as of October 2023 was 13.3% below the national median and 56.0% below the median listing price in the Boston metro area. Springfield also boasts a rich cultural scene, numerous parks and recreational opportunities, and a strong sense of community. The area is home to respected educational institutions, including colleges and universities, and healthcare, education, government, and manufacturing sectors are top employers. The metro is projected to have an unemployment rate of 4.1% at the end of 2024, slightly below the national rate of 4.2%.  Its central location in New England, with good transportation links, further enhances its appeal as a convenient place to call home.

Worcester, MA-CT

The Worcester, MA-CT metro area is also an attractive place for homebuyers due to its affordable housing options, convenient proximity to major cities like Boston, and a high quality of life with access to education, healthcare, cultural activities, and recreational opportunities. While its median list price is 14.7% above the national median, it is 41.8% below the Boston Metropolitan Area’s median list price and 33.2% the New York Metro Area’s median price. Both the Boston and New York metro areas are significant contributors to housing demand in Worcester. The area is expected to have an unemployment rate of 3.9% at the end of 2023, lower than the national rate of 4.2%. The region’s diverse economy, strong education institutions, and transportation infrastructure further enhance its appeal, while its historical charm and welcoming community make it a desirable place to call home in the Northeast.

Grand Rapids-Kentwood, MI

The blend of affordability, strong job market, and vibrant quality of life are highlights of the Grand Rapids metro area. The region offers a relatively low-cost housing market, making it a compelling choice for prospective homebuyers. As of October 2023, the median listing price in the metro was 8.2% less than the nation’s median price. Grand Rapids boasts a diverse and growing economy, with opportunities in manufacturing, healthcare, and the technology industries. The unemployment rate in the metro is projected to be 4.2%, matching the nation’s expected rate. The city is known for its dynamic arts and cultural scene, offering numerous museums, theaters, and music venues, along with an array of recreational activities, parks, and the picturesque Grand River. With a focus on education and family-friendly communities, Grand Rapids-Kentwood provides an appealing mix of opportunities and a high quality of life, making it a desirable destination for homebuyers seeking a balanced and enriching lifestyle in the Midwest.

Southern California Looks More Sunny in 2024

Among California metros, an interesting split emerges. Five California metros entered our top 10 list of housing markets but none were Bay Area or Northern Californian metros. The top five Californian metros include Oxnard, San Diego, Riverside, Bakersfield and Los Angeles. These five metros are expected to have sales growth of 13.1%, on average, in 2024, compared to an average decline of 4.1% for other Californian metros in the largest 100 list. 

Tempering this good news, in each case, these top California metros are still predicted to have historically low sales levels despite large improvement over depressed 2023 numbers. Mirroring national figures expected to total roughly 25% below 2017-2019 norms, sales in these Californian metros are also expected to be 20% to 35% lower than the typical pre-pandemic year in 2017 to 2019. 

Nevertheless, the top California markets might be more sensitive to the impact of elevated mortgage rates, given that only an average of 31.6% of homeowners in these areas owned their homes outright, without a mortgage. Put differently, this means that a higher share of homeowners in these areas are encumbered by some kind of debt on their home. Outright ownership is notably lower than the average share among the largest 100 markets, which stood at 36.7%. In fact, outright ownership was below the 100-market average in all five California top markets. Specifically, Oxnard, CA, stood out with the lowest share of homeowners who own their homes outright in the top 10 markets at 30.0%, followed by San Diego, CA, at 30.5%, and Riverside at 38.4%.

While greater mortgage usage may make these markets more sensitive to rising interest rates, the utilization of government-backed mortgage products could help many buyers safely enter the markets with a lower down payment and perhaps a more favorable mortgage rate, offering a compelling avenue to secure homes in these competitive markets. During the period spanning January to August 2023, FHA loans, specifically designed to assist first-time or minority homebuyers, played a substantial role, accounting for 15.8% of all mortgaged sales in these top markets. Notably, Bakersfield, CA, stood out with the highest share of FHA purchases at 26.7%, followed by Riverside, CA, at 22.9%. In the broader context, the prevalence of FHA loans among mortgaged purchases averaged 15.0% in the largest 100 markets.

Furthermore, veteran households in these prominent metropolitan areas could gain significant advantages through the utilization of VA loans, a loan type, characterized by its zero down payment requirement, flexible credit criteria, and lower mortgage rates. Realtor.com’s estimates reveal that with a no down payment VA loan, a first-time buyer could save $115 per month, amounting to over $1,375 annually, when compared to a 5% down payment conforming loan payment for a typically priced U.S. home on sale in September 2023. Notably, during the period from January to August 2023, San Diego, CA, emerged as a leader with a 16.5% share of VA loans, nearly double the largest 100 market average of 9.1%.

Key Wildcards

• Labor Market & Macroeconomy: While the housing markets for the top five Northeastern and Midwestern metros are expected to show strength in 2024, they are a reflection of local economic conditions. With local job markets expected to remain better or on par with the national economy, a stronger than expected increase in unemployment could diminish the forecast. Additionally, the labor markets in these areas are particularly driven by education, healthcare, manufacturing, and government. Weakness or outperformance in these sectors, would likely translate into commensurate shifts in sales trends. So far, the national unemployment rate and pace of job creation have indicated resilience in the labor market despite the Federal Reserve’s measures to try to end above-target inflation. Real Gross Domestic Product (GDP) growth nationwide is expected to be 1.7%, and the U.S. unemployment rate is projected to rise only slightly to 4.2% by the end of 2024. 
• Mortgage Rates: The top 5 Californian metros are expected to see sales growth in 2024 under our mid-range interest rate forecast scenario which expects mortgage rates have already topped in 2023 and will continue to gradually ease to 6.5% by the end of 2024. Should inflation take longer to tame than currently expected by investors, mortgage rates could take longer to fall and could even increase again. In modeling of an alternative high-rate scenario, these five California metros would see home sales flatten or even decline slightly as buyers in these higher cost and interest-rate sensitive markets re-assess their plans. 

Large Metros Expected to Outperform in Price Growth, Underperform in Sales

To wrap up 2023, our expectations are that the nation’s 100 largest metropolitan areas will end the year with 2.1% median existing home sale price growth, on average, and a decline in existing home sales of 23.9%, on average. At this pace of sale price growth, the 100 largest metropolitan areas are expected to outpace the national rate of only 0.3%. However, sales in these metros on average are expected to underperform even the national rate of decline of 19.0%. Generally, speaking, the continued stability in prices in 2023 has been the result of low inventory as demand, even weighed down by high interest rates, has met or outpaced supply. In the 100 largest metro areas, inventory declined by 2.7% on average in October 2023, a decline greater than the national rate of 2.0%. Moreover, the 100 largest metro areas are expected to end the year with a lower unemployment rate of 3.7%, on average, compared to the 4.2% national rate. Continued strength in the labor market has further supported home sale prices this past year. 

Looking forward to 2024, the split between the national and large metro trends is expected to continue similarly. Home sales in the 100 largest metros are forecasted to decline over 2024 by 2.2% on average, compared to the relatively stable growth rate of 0.1% nationally. The median sale prices in the 100 largest metros are forecasted to grow by only 1.2%, on average. However, this growth rate outpaces the national predicted decline of 1.7%. This mirrors trends seen in 2023 where sales declines were larger in large metro areas but price growth remained more positive.

Boosted by Strong Labor Markets, Northeastern Metros Are Expected to Outperform in Sales and Price Growth

Regionally, Northeastern large metros are the only ones expected to have sales growth next year, on average, by 2.0%. Conversely, sales are expected to continue to decline by 0.8% on average in metros in the Midwest, 1.0% in the West, and 5.3% in the South. Strong local economies have pushed unemployment down 0.4% in the Northeast from 2022 to 2023 and are also helping to drive the housing market forward even as unemployment rates have risen by 0.1 to 0.3% in the Midwest, South, and West. Nevertheless, existing home sales in metros in the Northeast are still expected to be 18.4% lower than the 2017-2019 pre-pandemic period, on average, and they are expected to be 22.5% lower in the South, 24.9% lower in the Midwest, and 40.1% lower in the West. On average, metros in the West are still expected to see price declines over the next year, by 1.4%, while the median sale prices in metros in the South are expected to grow by 0.1%, and they are expected to grow by 3.1% in the Midwest and the highest rate of 4.7% in the Northeast.

Southern metros are absent from this year’s list likely in part due to more favorable inventory conditions, propped up by new construction. So far in 2023, an average 23.1% of active inventory in the South was newly built, compared to 15.5% in the West, 14.8% in the Midwest,  and 11.6% in the Northeast. Additionally, the share in the South has grown 6 percentage points relative to pre-pandemic (2019). New construction offers buyers more inventory, which relieves price pressure and creates a more balanced market as existing homeowners choose not to sell. As a result, southern metros are not expected to see existing home sales and prices climb as high as other regions as buyers have more new construction options.

Few Markets See Sales Activity Back to Pre-Pandemic Norms

Among the full set of 100 metros forecast, only three metros are expected to have sales above the rate seen in the years immediately before the pandemic: Scranton, PA (ranked 13); Toledo, OH (1); and El Paso, TX (14).  In recent history, these metros have been less prone to extreme boom and bust cycles and their growth was fairly modest in pre-pandemic and even pandemic-peak periods. Furthermore, as we noted in the 2023 Top Markets report, El Paso tends to see significant cash transaction activity as well as VA and FHA loan purchases, which have likely served as stabilizers in contrast with the mortgage rate induced whiplash that other markets have experienced.

Sales Growth Faster in Markets with Less Flexible Work Modes 

Remote work has significantly impacted home buying decisions, liberating individuals from the constraint of workplace proximity. According to Realtor.com’s recent research, flexible work options, such as hybrid and fully remote arrangements, enable homebuyers to explore a broader range of properties, including those outside their local market. This shift is beneficial for those seeking larger homes in suburban areas or wanting to be closer to family, while also addressing affordability concerns in expensive urban markets.

Implementing the methodology detailed in our recent publication, we classified the largest 100 metros into two categories based on the flexibility of their work modes. As more and more companies conduct return-to-office mandates, it is not surprising to find that markets with less flexible work arrangements are predicted to show an average year-over-year growth in existing home sales of +0.6%, while markets with more flexible work modes are anticipated to experience a -4.9% annual decline in sales. Specifically, the accelerated sales growth in markets with less flexible work arrangements could be attributed to home shoppers confined to local searches due to their work constraints and thus boost local sales activities. Conversely, markets with more flexible work modes provide shoppers the option to explore homes beyond their immediate vicinity and thus will experience a decline in sales activities. Notably, this pattern persists even when controlling for affordability levels across the largest 100 metros.

Realtor.com® 2024 Housing Forecast – 100 Largest U.S. Metros (Ranked)

Methodology 

Realtor.com®’s model-based forecast uses data on the housing market and overall economy to estimate 2024 values for these variables for the 100 largest U.S. metropolitan statistical areas by population size. These markets are then ranked by combined forecasted growth in home prices and sales. Results are calculated to two decimal places and ranked at this degree of specificity, there were no ties. For publication, results are rounded to one decimal place, and this can result in minor differences between the rounded and unrounded sums.

Source: Realtor.com