The Best Housing Markets for Buyers and Sellers in 2024: A Comprehensive Guide
The American housing market is currently navigating a complex landscape marked by persistently high mortgage rates and a stubbornly tight supply of homes. These headwinds are creating significant challenges for both prospective homebuyers and current homeowners looking to sell. However, the severity of this crisis varies dramatically from state to state, with some regions offering far more favorable conditions than others. Understanding these regional differences is crucial for anyone looking to make a move in the current market.
When corporations evaluate potential locations for relocation or expansion, the local residential real estate market is a key factor in their decision-making process. Companies want to ensure that their prospective employees will be able to find affordable housing that also represents a sound financial investment. Consequently, the housing market plays a significant role in determining a state’s overall economic competitiveness.
State-level economic competitiveness rankings, such as CNBC’s annual “America’s Top States for Business” study, incorporate housing market metrics to provide a comprehensive view of each state’s economic health. These rankings evaluate a balance of affordability and value, taking into account key indicators such as price appreciation, seller gains, housing inventory levels, and the pace of new construction. Furthermore, the analysis looks for signs of market stress, including foreclosure activity and the prevalence of underwater mortgages, where homeowners owe more on their mortgage than their home is worth.
While every individual’s priorities in the housing market may differ, the following ten states offer some of the most compelling opportunities for both buyers and sellers in 2024. These markets are demonstrating a relative balance between affordability and value, even amidst the broader national challenges.
Delaware: The First State’s Subtle Strengths
Delaware, often referred to as “The First State,” presents a housing market that is characterized by a unique combination of modest affordability and exceptionally low property taxes. While the overall housing affordability index in Delaware is roughly on par with the national average, the state’s low property tax burden provides a significant financial advantage for homeowners. According to data from real estate analytics firm ATTOM, Delaware homeowners pay an effective property tax rate of less than half a percent, ranking as the fourth-lowest in the United States.
This low tax environment helps to offset the median home price, which stands at approximately $360,700. The state’s economy is generally considered stable, earning it the 10th spot in the 2024 Economy category of the Top States for Business study, with a B- grade. Home price appreciation has been solid, registering at 4.73%. However, inventory levels remain tight, with approximately two months of supply available as of July 2024. The affordability score, calculated on a scale where 2 represents the most affordable, is 0.56, indicating that while home prices are not low, the tax structure makes homeownership more manageable for many residents.
Indiana: Midwestern Value and Growth
The Hoosier State of Indiana offers a compelling blend of affordability and healthy price appreciation, a combination that is increasingly rare in the current housing market. Indiana stands out for its combination of low property taxes and robust home price growth. Despite tight inventory levels, which stood at two months in July 2024, homebuyers in Indiana are still finding attractive properties at reasonable prices.
Indiana’s economy is performing well, ranking 19th overall in the 2024 Top States for Business study with a C grade. The state has seen impressive price appreciation of 8.02%, indicating strong demand and limited supply. The median sales price is a very attractive $265,300, making it one of the most affordable markets on this list. The affordability score is a healthy 0.81, and the effective property tax rate is relatively low at 0.86%. This combination of factors makes Indiana a standout market for those seeking value and potential equity growth.
Georgia: A Peach State Market on the Rise
Georgia, known as the Peach State, is experiencing a healthy housing market characterized by rising inventory levels and active home construction. These factors are helping to moderate price growth while still offering opportunities for both buyers and sellers. The state’s economy is robust, ranking 7th overall in the 2024 Top States for Business study with a B grade.
Home price appreciation in Georgia has been strong at 7.16%, reflecting the state’s continued popularity and economic growth. Inventory levels have increased to three months as of July 2024, providing more options for buyers. The median sales price is $385,600, and the affordability score is 0.59. Property taxes are reasonable at 0.82%, making Georgia an attractive option for those seeking a balance of growth potential and affordability. Homebuilders have been particularly active in Georgia, with the state ranking among the top in the nation for housing starts.
Tennessee: Balancing Affordability with Growth
Tennessee, the Volunteer State, offers a dynamic housing market with some of the lowest property taxes in the country. However, affordability has become a growing concern in some areas due to rising home prices. To address this, a new state law includes incentives aimed at promoting the development of more affordable multifamily housing units.
In the single-family market, inventory has begun to build, which has helped to temper price gains and is likely to attract more buyers to the market. Tennessee’s economy is one of the strongest in the nation, ranking 3rd overall in the 2024 Top States for Business study with a B+ grade. Price appreciation has been solid at 6.24%, with a median sales price of $393,000. Inventory levels are at three months, and the affordability score is 0.49, reflecting the affordability challenges despite the low tax rate of 0.44%.
Nevada: Managing Volatility with Active Construction
Nevada, the Silver State, has a housing market historically known for its volatility, and the current year is no exception. However, the state has managed to maintain manageable inventory levels and a healthy pace of new construction. While housing affordability remains an issue, price moderation has been a positive development for buyers, though it presents a challenge for sellers looking to maximize their returns.
Nevada’s economy is ranked 8th overall in the 2024 Top States for Business study with a B grade. Price appreciation has been more subdued at 3.39%, with a median sales price of $458,300. Inventory stands at two months, and the affordability score is 0.43%. Property taxes are low at 0.48%, and while there has been an uptick in foreclosure activity, home equity levels remain healthy. The active construction sector is crucial for meeting demand in this growing state.
New Jersey: High Prices and High Taxes
New Jersey, the Garden State, has experienced a surge in home prices over the past year, driven by a persistently active housing market. Affordability in New Jersey could certainly be better, but it remains within a range that is somewhat aligned with the state’s median income levels. However, the state faces significant headwinds in the form of the second-highest property taxes in the nation, trailing only Illinois, and a relatively high foreclosure rate.
New Jersey’s economy is ranked 17th overall in the 2024 Top States for Business study with a C+ grade. Price appreciation has been robust at 11.38%, with a median sales price of $532,400. Inventory is tight at two months, and the affordability score is 0.56. The effective property tax rate is a substantial 1.64%, which significantly impacts the overall cost of homeownership. For sellers, the high prices may be attractive, but buyers must contend with both high home values and high taxes.
North Carolina: Growth and Affordability
North Carolina, the Tar Heel State, is a rapidly growing region with a dynamic housing market. Homebuilders have been particularly active, with the state ranking second in the nation for housing starts last year, surpassed only by the fast-growing state of Alabama. Despite this construction activity, inventory levels remain tight enough to support strong price appreciation.
North Carolina’s economy is performing exceptionally well, ranking 4th overall in the 2024 Top States for Business study with a B+ grade. Price appreciation has been healthy at 6.98%, with a median sales price of $383,700. Inventory levels are at two months, and the affordability score is 0.52. Property taxes are reasonable at 0.6%, which is a significant advantage given the state’s rapid population growth. The combination of strong economic growth and manageable taxes makes North Carolina a highly attractive market.
Arizona: Balancing Gains and Affordability Challenges
Arizona, the Grand Canyon State, continues to offer opportunities for sellers to realize decent gains, even as home inventory levels build. Construction activity remains strong, and homeowners have generally seen healthy appreciation in their property values. The state boasts low property taxes, which is a significant draw for residents. However, housing affordability is a notable challenge in the Arizona market.
Arizona’s economy is ranked 5th overall in the 2024 Top States for Business study with a B+ grade. Price appreciation has been solid at 6.63%, with a median sales price of $450,800. Inventory levels are at three months, and the affordability score is 0.44, reflecting the affordability pressures in the state. The effective property tax rate is very low at 0
