The Hottest US Real Estate Markets for 2024: Where Sales Will Surge Amidst Falling Rates
The US housing market is poised for a dramatic resurgence in 2024, as predicted by the National Association of Realtors (NAR). After two years of sluggish sales and sky-high mortgage rates, a projected decline in interest rates is expected to unleash a wave of pent-up demand, reigniting activity across the nation.
In 2023, the housing market experienced its most significant downturn in over a decade. Home sales plummeted by approximately 18%, marking the first time in 14 years that fewer than four million homes changed hands. This steep decline was primarily driven by mortgage rates that soared to multi-decade highs, peaking near 7.8% in late October. The combination of rising interest rates and limited inventory created a perfect storm for prospective buyers, pushing affordability to historic lows.
Despite the sharp drop in demand, home prices remained remarkably resilient. The NAR found that a persistent shortage of available homes prevented any meaningful price corrections. This lack of supply added further strain to buyers who were already grappling with high borrowing costs.
However, the outlook for 2024 offers a beacon of hope for buyers, sellers, and real estate professionals alike. The NAR projects that the average 30-year fixed mortgage rate will fall to 6.3% by next year—a significant improvement from 2023 levels. This forecast is based on the expectation that the Federal Reserve will cut interest rates four times throughout 2024, beginning in the spring.
“The decline in mortgage rates is expected to draw more buyers, including those returning to the market, consequently bolstering demand for housing,” the NAR reported. “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 anticipated improvement in affordability is expected to spark a resurgence in housing market activity. The NAR predicts that new home sales will surge by 19%, while existing home sales will climb by 13%. This rebound is projected to generate substantial windfalls for realtors and lead to further home price appreciation for sellers.
Top 10 Markets Poised for Explosive Growth in 2024
To identify the areas most likely to benefit from this market turnaround, the NAR compiled a list of 10 metropolitan areas with the greatest pent-up demand. These “sleeping giants” are expected to witness a surge in home transactions as market conditions improve.
The NAR’s analysis considered 10 factors across the 100 largest US markets, including:
Home price growth in Q3 2023 compared to the previous year
Renter affordability—the percentage of renters who can afford to buy a median-priced home
Returning buyer potential—the share of households that could afford to buy if rates fell to 6.5%
Job growth rate
Income growth rate
Crime rate
Median home price
Median rent
Market liquidity
Supply-side factors
Each market on this list presents a unique combination of affordability, job market strength, and buyer demand that positions it for significant growth in 2024.
Austin, Texas
2023 Home Price Growth: -7.7%
Share of Renters Who Can Afford a Median-Priced Home: 18.9%
Share of Returning Buyers if Rates Fall to 6.5%: 5.1%
Austin is emerging as a powerhouse market, boasting one of the largest pools of potential “returning” buyers. If mortgage rates decline to 6.5%, an estimated 5.1% of all households in the Austin metro area would regain the ability to afford the median-priced home. Despite ongoing affordability challenges, the city is attracting a growing number of high-earning Millennials (those making over $100,000 annually) relocating from other states. While home prices in Austin have demonstrated sensitivity to market changes, this influx of affluent renters, combined with returning buyers, is anticipated to fuel significant growth in the local housing market. According to the Austin Board of Realtors, the market has already shown positive signs of a turnaround.
Dallas, Texas
2023 Home Price Growth: 1.9%
Share of Renters Who Can Afford a Median-Priced Home: 21.5%
Share of Returning Buyers if Rates Fall to 6.5%: 4.9%
Dallas stands out with the second-fastest growing job market among the nation’s 100 largest metro areas, having created over 4% more jobs compared to the previous year. With 22% of renters already able to afford a median-priced home, the anticipated decline in mortgage rates in 2024 is expected to further stimulate housing activity. Dallas offers a compelling combination of robust job growth and improving affordability, making it an attractive destination for both first-time buyers and those looking to upgrade.
Dayton, Ohio
2023 Home Price Growth: 9.1%
Share of Renters Who Can Afford a Median-Priced Home: 30.6%
Share of Returning Buyers if Rates Fall to 6.5%: 4.7%
Dayton presents a compelling case for affordability, offering accessible options for first-time buyers. In this market, prospective buyers can afford to purchase more than half of the available listings, a rarity in today’s housing landscape. Furthermore, Dayton’s strong job market is expected to enable more renters to transition to homeownership in the coming year. This combination of low prices and solid employment opportunities positions Dayton as a prime market for growth in 2024.
Durham/Chapel Hill, North Carolina
2023 Home Price Growth: 2.6%
Share of Renters Who Can Afford a Median-Priced Home: 18.8%
Share of Returning Buyers if Rates Fall to 6.5%: 5.6%
The Research Triangle region, anchored by Durham and Chapel Hill, is a dynamic hub of innovation and economic growth. This metro area boasts the highest share of potential “returning\” buyers, with 6% of households regaining affordability if rates drop to 6.5%. While the region faces a shortage of affordable listings for first-time buyers, its exceptional wage growth—averaging a 13 percentage point increase from the previous year—is helping to offset these challenges. The strong job market and rising incomes in Durham/Chapel Hill are expected to drive significant housing market activity in 2024.
Harrisburg, Pennsylvania
2023 Home Price Growth: 8.5%
Share of Renters Who Can Afford a Median-Priced Home: 32.1%
Share of Returning Buyers if Rates Fall to 6.5%: 5.3%
Harrisburg offers a rare combination of affordability and high-earner attraction. Already accessible to over 30% of renters, the market is also drawing high-income renters from other states. With the anticipated decline in mortgage rates, both inventory and buying activity are expected to increase as existing homeowners list their properties. Notably, 42% of homeowners in Harrisburg have already surpassed the area’s average tenure of 15 years, indicating a significant pool of potential sellers ready to re-enter the market.
Houston, Texas
2023 Home Price Growth: 3.7%
Share of Renters Who Can Afford a Median-Priced Home: 23.8%
Share of Returning Buyers if Rates Fall to 6.5%: 4.3%
Rounding out the Texas Triangle on this list, Houston offers a compelling blend of affordability, robust job growth, and strong wage increases that are outpacing the national average. Housing affordability for renters in Houston surpasses that of most markets across the country, with 23.8% of renters able to afford a median-priced home. This combination of economic strength and housing accessibility positions Houston for significant growth in 2024.
Nashville, Tennessee
2023 Home Price Growth: 0.7%
Share of Renters Who Can Afford a Median-Priced Home: 13.8%
Share of Returning Buyers if Rates Fall to 6.5%: 4.6%
The anticipated resurgence of “returning\” buyers is expected to drive market growth in Nashville, Music City’s dynamic economy continues to attract Millennial renters earning over $100,000. However, the market faces a significant shortage of listings affordable to first-time buyers. This supply-demand imbalance, combined with the influx of high-earning renters, is expected to create a highly competitive environment as mortgage rates decline.
Philadelphia, Pennsylvania
2023 Home Price Growth: 4.6%
Share of Renters Who Can Afford a Median-Priced Home: 21.5%
Share of Returning Buyers if Rates Fall to 6.5%: 4.7%
Philadelphia is poised for a boost driven by pent-up demand from both buyers and sellers as the rate lock-in effect begins to ease. Forty-four percent of homeowners in the area have exceeded the average tenure of 17 years,
