The 10 Hottest Real Estate Markets Poised for a 2024 Resurgence
The U.S. housing market is gearing up for a dramatic comeback. After two years of sluggish sales and frustrated buyers, the National Association of Realtors (NAR) predicts a significant rebound in 2024. This shift is largely attributed to falling mortgage rates, which are expected to unlock pent-up demand from both buyers and sellers.
In 2023, the market experienced one of its sharpest downturns in over a decade. Home sales plummeted by approximately 18%, marking the slowest year since 2010. This decline was primarily driven by soaring interest rates, with the 30-year fixed mortgage rate peaking near 7.8% in late October. High rates deterred many potential buyers, while an existing inventory shortage prevented home prices from dropping significantly, creating a difficult environment for those seeking to enter the market.
However, the forecast for 2024 offers a beacon of hope. The NAR projects that mortgage rates will ease to an average of 6.3% as the Federal Reserve implements four interest rate cuts starting in the spring. This easing of rates is expected to revitalize the market, with the NAR forecasting a 19% increase in new home sales and a 13% rise in existing home sales. Such activity will undoubtedly create new opportunities for real estate professionals and offer sellers the prospect of home price appreciation.
To identify the areas best positioned to benefit from this market shift, the NAR analyzed the 100 largest metropolitan areas. Their analysis focused on ten key metrics, including Q3 2023 home price growth, renter affordability, the potential pool of returning buyers if rates drop to 6.5%, job growth, income growth, and crime rates. This comprehensive approach highlights regions where pent-up demand is most concentrated, suggesting that transactions are set to surge in these overlooked markets.
Here are the 10 metropolitan areas identified by the NAR as having the strongest potential for a real estate resurgence 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 Mortgage Rates Fall to 6.5% or Lower: 5.1%
Austin, once a runaway market known for its exponential price growth, experienced a notable cooldown in 2023. Home prices dipped by 7.7%, creating a more accessible entry point for buyers. What makes Austin particularly interesting is its substantial pool of “returning” buyers—those who were priced out when rates were lower but could re-enter the market if rates decline to 6.5%. This segment represents 5.1% of all households in the metro area, indicating significant pent-up demand.
Despite the recent price adjustments, Austin continues to attract high-earning Millennials, particularly those making over $100,000, who are relocating from other states. This influx of talent, combined with the returning buyers, is expected to fuel a robust recovery in home sales. Early indicators are positive, with the Austin Board of Realtors reporting a turnaround in sales activity. For real estate professionals, the combination of affordability and sustained demand suggests a busy year ahead.
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 Mortgage Rates Fall to 6.5% or Lower: 4.9%
Dallas stands out for its dynamic economic landscape. The metro area boasts one of the fastest-growing job markets in the nation, with employment expanding by over 4% compared to the previous year. This robust job growth translates into greater purchasing power for renters, with 21.5% currently able to afford a median-priced home. As mortgage rates ease, an additional 4.9% of households are expected to enter the market, further intensifying demand.
The Dallas market exemplifies a healthy balance between affordability and economic opportunity. While prices saw a modest increase of 1.9% in 2023, the strong job market ensures that buyers remain engaged. This combination of stable prices and job creation positions Dallas as a prime location for real estate growth in 2024.
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 Mortgage Rates Fall to 6.5% or Lower: 4.7%
Dayton, Ohio, represents a compelling case study in affordability and accessibility for first-time buyers. This market offers a substantial inventory of homes that are within reach for a large portion of the population. Currently, 30.6% of renters can afford to purchase a median-priced home, and this figure is expected to grow as rates fall. Furthermore, first-time buyers find more than half of all listings in Dayton to be affordable, highlighting the market’s potential for younger homebuyers.
The strong job market in Dayton is a key driver of this trend, enabling more renters to transition into homeownership. While home prices saw significant growth of 9.1% in 2023, the underlying affordability metrics suggest that demand will remain robust. For agents specializing in first-time buyers, Dayton offers a wealth of opportunity.
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 Mortgage Rates Fall to 6.5% or Lower: 5.6%
The Research Triangle region, anchored by Durham and Chapel Hill, is set for a significant boost in 2024. This area features the highest percentage of “returning\” buyers among the top 10 markets, with 5.6% of households regaining affordability if rates drop to 6.5%. This indicates a substantial pool of buyers who have been sidelined by recent market conditions.
A notable challenge in this market is the limited supply of affordable listings for first-time buyers. However, this is partially offset by strong wage growth, which has seen average earnings rise by 13 percentage points year-over-year. This wage growth, combined with the influx of returning buyers, is expected to drive increased activity. The Durham/Chapel Hill market exemplifies how strong income growth can help offset housing affordability challenges.
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 Mortgage Rates Fall to 6.5% or Lower: 5.3%
Harrisburg, Pennsylvania, stands out for its exceptional affordability and its ability to attract high-earning renters from out of state. With 32.1% of renters already able to afford a median-priced home, this market offers a strong foundation for growth. The anticipated decline in mortgage rates is expected to further boost both inventory and buyer activity as existing homeowners list their properties.
A significant factor in Harrisburg’s potential is the high rate of homeownership duration. Approximately 42% of homeowners have surpassed the 15-year mark, which is the average tenure for the area. As rates fall, these long-term owners may be motivated to sell, increasing inventory and providing opportunities for new buyers. This combination of affordability and long-term owner retention positions Harrisburg for a dynamic 2024.
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 Mortgage Rates Fall to 6.5% or Lower: 4.3%
Rounding out the trio of Texas markets on this list, Houston offers a compelling mix of affordability and economic vitality. Housing affordability for renters in Houston surpasses that of most metropolitan areas across the country, with 23.8% currently able to afford a median-priced home. This strong foundation is further bolstered by fourfold wage growth that outpaces the national level, creating a favorable environment for potential buyers.
While the pool of returning buyers is smaller at 4.3%, the overall economic strength and affordability metrics suggest that Houston will see increased activity in 2024. The combination of robust job growth and accessible home prices makes this a market to watch for real estate professionals seeking opportunities in the Sun Belt.
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 Mortgage Rates Fall to 6.5% or Lower: 4.6%
Nashville, often referred to as \”Music City,\” is poised for a resurgence driven by the anticipated return of buyers. The market faces a notable housing shortage of listings that are affordable for first-time buyers. However, the strong job market continues to attract high-earning Millennials, with many earning over $100,000.
If mortgage rates decline to 6.5%, an estimated 4.6% of households could re-enter the market, adding much-needed
