Realtor.com® has pinpointed the U.S.'s local housing markets that show growth promise in its 2024 Top Housing Markets forecast. These markets will likely experience a notable increase in home sales and listing prices in the following year.
The top 10 markets, listed in order, are Toledo, Ohio, Oxnard-Thousand Oaks-Ventura, Calif., Rochester, N.Y., San Diego-Chula Vista-Carlsbad, Calif., Riverside-San Bernardino-Ontario, Calif., Bakersfield, Calif., Springfield, Mass., Worcester, Mass.-Conn., Grand Rapids-Kentwood, Mich., and Los Angeles-Long Beach-Anaheim, Calif.
Realtor.com® 2024 Top Housing Markets
Most of this year's Top Markets offer relatively affordable housing compared to the national median home price, particularly in the Midwest and Northeast. In California, which features five of the top 10 metro areas, markets will bounce back from a challenging 2023 despite historically low sales levels.
New research from Realtor.com® indicates that nearly half of first-time home buyers (49%) view buying as a better option than renting in 2024, and three-quarters (76%) believe that achieving the dream of homeownership is still feasible. Moreover, first-time home buyers planning to purchase a home in the next 12 months have saved for an average of a little over two years. They have been setting aside around $800 per month, with almost all of them (95%) expressing confidence in their ability to afford a home within their lifetime and 40% anticipating affordability within the following year.
In 2024, sales price growth in the nation's 100 largest metropolitan areas will likely surpass the national average. Median sales prices in these areas are anticipated to increase by an average of 1.2%, while there is an expected 1.7% decline nationwide. Home sales in the 100 largest markets are predicted to decrease by 2.2%, in contrast to the relatively stable sales nationwide, which will see a minimal increase of 0.1%.
Now that we're seeing the beginning of an affordability turnaround, home buyers are still looking for markets where they can capitalize on lower prices. Even in some of the more expensive markets, we'll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent.Realtor.com® Chief Economist Danielle Hale
Northeastern and Midwestern top markets are driven by affordability, with most of the top five markets in those regions boasting median listing prices lower than the national average. In these areas, 37.9% of homeowners reside without a mortgage, providing insulation from the impact of higher interest rates. Their local economies thrive on education, healthcare, and manufacturing, except Toledo, which is expected to experience robust job growth, keeping unemployment below the estimated national average of 4.2% by the end of 2024. Additionally, these areas offer a high quality of life, with appealing recreational, cultural, and educational amenities for homeowners.
Meanwhile, five of this year's top 10 metro areas in Southern California are projected to outperform the state. These markets will likely experience an estimated average sales growth of 13.1% in 2024, in contrast to a sales decline of 4.1% in other California areas within the top 100. Although sales will probably surpass the previous year, they are still 20%-35% lower than the typical year before the pandemic in 2017-2019. Furthermore, these markets are more susceptible to fluctuations in mortgage rates, as only 31.6% of homeowners in these Southern California markets are mortgage-free.
Economic conditions and mortgage rates remain wildcard factors in these scenarios. The national labor market has thus far shown resilience despite interest-rate increases by the Federal Reserve. However, in Northeastern and Midwestern top markets, housing market growth could be jeopardized if unemployment surpasses expectations or critical sectors such as education, healthcare, manufacturing, and government experience tepid job creation. In California, the growth in home sales in the top five markets will hinge on a gradual easing of mortgage rates, predicted to reach 6.5% by the end of 2024. Should inflation persist and mortgage rate declines stall or reverse, these markets could witness a plateau or decline in home sales.