The US Housing Market Set for a Major Comeback in 2024: These 10 Markets Will Lead the Charge
The US housing market has weathered a tumultuous few years, but the forecast for 2024 is looking significantly brighter. According to a groundbreaking report by the National Association of Realtors (NAR), we’re on the cusp of a major rebound, with sales poised to surge thanks to easing mortgage rates and pent-up demand.
After a staggering 18% decline in 2023 — the largest drop in at least 15 years — and fewer than four million homes changing hands for the first time since 2010, buyers are finally getting a much-needed break. The culprit behind the slowdown? Sky-high mortgage rates that peaked near 7.8% in late October, pushing even the most determined buyers to the sidelines.
But here’s the twist: despite the demand crunch, home prices refused to budge meaningfully. Why? A persistent inventory shortage meant there simply weren’t enough houses to meet the remaining demand, exacerbating the affordability crisis for stressed buyers.
That’s all set to change in 2024. The NAR projects that the Federal Reserve will cut interest rates four times starting in the spring, bringing the average 30-year fixed mortgage rate down to a more manageable 6.3%. While not exactly a dream scenario, it’s a marked improvement that’s expected to lure buyers back in droves.
“The decline in mortgage rates is expected to draw more buyers, including those returning to the market, consequently bolstering demand for housing,” the NAR researchers noted. “These lower mortgage rates will also ease the rate lock-in effect by enticing more existing homeowners to re-enter the market and list their homes.”
The ripple effect will be felt across the board. The NAR predicts new home sales will jump 19% and existing property sales will climb 13%, creating a bonanza for realtors. Homeowners looking to sell should also see price gains, making 2024 a potentially lucrative year for sellers.
But where will this newfound activity concentrate? The NAR has identified 10 metropolitan areas with the most pent-up demand — sleeping giants where transactions are set to explode after a dormant stretch.
To compile this exclusive list, the NAR analyzed the 100 largest US markets, factoring in everything from Q3 2023 home price growth and the share of renters who could actually afford a median-priced home, to the number of buyers who’d jump back into the market if rates fell to 6.5%. Job growth, income growth, and crime rates were also key considerations.
Each market tells a unique story, but they all share one thing: the potential for a dramatic turnaround. Here are the 10 hottest real estate markets to watch in 2024:
Austin, Texas: The Comeback Kid
2023 Home Price Growth: -7.7%
Share of Renters Who Can Afford to Buy: 18.9%
Share of Returning Buyers If Rates Fall: 5.1%
Austin is poised for a spectacular comeback after a challenging 2023. This tech hub has one of the largest pools of “returning” buyers, with 5.1% of households gaining the means to afford a median-priced home if rates drop to 6.5%.
Despite the housing cost challenges, Austin continues to attract high-earning Millennials from other states, with many earning over $100,000 flocking to the area. While prices are sensitive to market shifts, the influx of these well-compensated renters, combined with returning buyers, is expected to fuel significant growth. In fact, the Austin Board of Realtors has already reported a positive turnaround in home sales activity.
Why This Matters: Austin’s resilience lies in its ability to attract top talent despite rising costs. As affordability improves slightly, this tech-driven market is expected to see a surge in demand that could quickly absorb existing inventory. For investors and buyers, this presents a prime opportunity to enter a market with proven long-term appreciation potential.
Dallas, Texas: The Economic Powerhouse
2023 Home Price Growth: 1.9%
Share of Renters Who Can Afford to Buy: 21.5%
Share of Returning Buyers If Rates Fall: 4.9%
Dallas boasted the second-fastest growing job market among the 100 largest metros, creating over 4% more jobs than the previous year. With 22% of renters already able to afford a median-priced home, even modest rate improvements could unleash a wave of pent-up demand.
Why This Matters: Dallas exemplifies Texas’s economic juggernaut status. Its robust job market creates a constant influx of new residents, ensuring sustained demand for housing. The fact that nearly a quarter of renters can already afford homeownership positions Dallas as a prime market for first-time buyers looking to make the leap.
Dayton, Ohio: The Affordability Haven
2023 Home Price Growth: 9.1%
Share of Renters Who Can Afford to Buy: 30.6%
Share of Returning Buyers If Rates Fall: 4.7%
Dayton stands out for its exceptional affordability and abundant options for first-time buyers. A staggering 30.6% of renters can already afford to purchase more than half of the listings in this market. Add to that a strong job market and you have a recipe for explosive growth.
Why This Matters: Dayton offers a refreshing alternative to overheated coastal markets. Its high affordability threshold means that even small rate reductions can unlock homeownership for a significant portion of the population. For those priced out of traditional markets, Dayton represents a golden opportunity.
Durham/Chapel Hill, North Carolina: The Research Triangle Rises
2023 Home Price Growth: 2.6%
Share of Renters Who Can Afford to Buy: 18.8%
Share of Returning Buyers If Rates Fall: 5.6%
The renowned Research Triangle is set for a boost, with Durham leading the pack with the highest share of “returning” buyers at 6%. While affordable listings for first-time buyers are scarce, the area’s tremendous wage growth — averaging 13 percentage points higher than last year — is rapidly closing the gap.
Why This Matters: The Research Triangle’s combination of high-paying jobs and a burgeoning tech and research sector creates a powerful economic engine. As wages continue to rise, more renters will gain the means to purchase homes, fueling a surge in demand that could transform the local market.
Harrisburg, Pennsylvania: The Unexpected Gem
2023 Home Price Growth: 8.5%
Share of Renters Who Can Afford to Buy: 32.1%
Share of Returning Buyers If Rates Fall: 5.3%
Harrisburg is quietly emerging as a hot spot, already affordable for over 30% of renters. What’s more, it’s attracting high-earner renters from other states. With anticipated rate declines in 2024, both inventory and buying activity are expected to increase as existing homeowners, 42% of whom have surpassed the area’s average tenure of 15 years, finally list their homes.
Why This Matters: Harrisburg represents the kind of overlooked market that could see the most dramatic transformation. Its existing affordability combined with an influx of high-income earners creates a perfect storm for growth. The high rate of long-term homeowners also suggests significant pent-up inventory waiting to be unleashed.
Houston, Texas: The Diversified Giant
2023 Home Price Growth: 3.7%
Share of Renters Who Can Afford to Buy: 23.8%
Share of Returning Buyers If Rates Fall: 4.3%
Houston, the third Texas market to make the list, benefits from strong job and wage growth that’s outpacing the national average. With 23.8% of renters able to afford median-priced homes, this market is well-positioned for a significant rebound.
Why This Matters: Houston’s diversified economy, less reliant on a single industry, provides a stable foundation for housing market growth. Its affordability and strong wage growth create a compelling value proposition for buyers seeking a high quality of life without the premium prices of other major cities.
Nashville, Tennessee: The Music City’s Comeback
2023 Home Price Growth: 0.7%
Share of Renters Who Can Afford to Buy: 13.8%
Share of Returning Buyers If Rates Fall: 4.6%
Nashville’s anticipated resurgence will be driven by returning buyers, while its strong job market continues to attract high-earning Millennials. However, the market faces a significant shortage of affordable listings for first-time buyers.
Why This Matters: Nashville’s appeal as a lifestyle destination continues to drive demand. Even with affordability challenges, the influx of high-income earners is expected to stimulate activity as rates ease. The key for this market will be the development of more starter homes to meet the needs of first-time buyers.
Philadelphia, Pennsylvania: The Historic Market on the Rise
2023 Home Price Growth:
