The Hottest US Housing Markets for 2024: Where Pent-Up Demand Will Drive Sales
The US housing market is gearing up for a major comeback in 2024 after two sluggish years. According to the National Association of Realtors (NAR), falling mortgage rates are expected to bring buyers back in force, unlocking pent-up demand across the country. Home sales, which plummeted an estimated 18% in 2023—the steepest decline in at least 15 years—are projected to rebound strongly.
This turnaround hinges on improving affordability. With 30-year fixed mortgage rates expected to ease from their recent peaks near 7.8% down to an average of 6.3% in 2024, more buyers will be able to enter the market. The NAR forecasts a 13% rise in existing home sales and a 19% surge in new home sales, creating significant opportunities for realtors, sellers, and buyers alike.
To identify where this activity will be most concentrated, the NAR analyzed the 100 largest US metropolitan areas, focusing on factors like home price appreciation, renter affordability, the potential pool of returning buyers, job and income growth, and crime rates. The result is a list of 10 cities poised for a boom as dormant demand awakens.
Here are the top 10 US real estate markets expected to experience the most significant activity in 2024:
Austin, Texas
Despite experiencing a 7.7% dip in home prices during 2023, Austin remains a magnet for buyers. The city boasts one of the largest pools of “returning” buyers—households that can once again afford a median-priced home if rates drop to 6.5% or lower. In Austin’s case, 5.1% of all households fall into this category.
A key driver of Austin’s market is the influx of high-earning Millennials (earning $100,000 or more) relocating from other states. While housing costs remain a challenge, this demographic shift is fueling demand. The Austin Board of Realtors has already noted a positive turnaround in home sales activity, signaling that the market is awakening. The city’s robust job market and growing appeal to tech professionals continue to support its long-term housing prospects.
Dallas, Texas
Joining its Texas neighbor on the list, Dallas stands out for its dynamic economy. It ranked second among the 100 largest metro areas for job market growth, adding over 4% more jobs compared to the previous year. This economic strength translates to housing affordability, with 22% of renters in Dallas able to afford a median-priced home.
As mortgage rates decline in 2024, Dallas is well-positioned to see a significant increase in housing activity. The combination of a booming job market and a substantial base of renters who can transition to homeownership makes Dallas a prime candidate for a real estate resurgence. The city’s diverse economy and relatively affordable housing compared to other major tech hubs continue to attract residents and investors.
Dayton, Ohio
Dayton represents the affordability end of the spectrum, offering numerous opportunities for first-time buyers. A remarkable 30.6% of renters in this market can afford to purchase a median-priced home, and buyers can afford more than half of all available listings. This high level of accessibility is a major draw.
Furthermore, Dayton’s strong job market provides the economic foundation for sustained growth. With 4.7% of households potentially returning to the market if rates fall, and a significant share of listings being affordable, Dayton is poised for a surge in activity. The city’s lower cost of living and improving economic outlook make it an attractive destination for buyers seeking value and opportunity.
Durham/Chapel Hill, North Carolina
Located in the heart of the Research Triangle, this metro area leads the nation in the share of “returning” buyers. A full 6% of households in Durham/Chapel Hill can once again afford to buy a home if rates drop to 6.5%. This pent-up demand is significant, even though the area currently faces a shortage of affordable listings for first-time buyers.
What makes this region particularly compelling is its exceptional wage growth. Average earnings have increased by 13 percentage points year-over-year, outpacing the national average. This wage growth, combined with the high concentration of returning buyers, suggests that housing demand will surge once mortgage rates ease. The Research Triangle’s strong economy, anchored by universities and technology companies, provides a solid foundation for long-term housing market health.
Harrisburg, Pennsylvania
Harrisburg offers a compelling combination of affordability and growing appeal to high-earning renters. Over 30% of renters in this market can already afford a median-priced home, and the area is attracting high-earning professionals from other states. The anticipated decline in mortgage rates is expected to further boost both inventory and buying activity.
A significant factor here is the rate lock-in effect, where existing homeowners are reluctant to sell and lose their low-interest mortgages. However, in Harrisburg, 42% of homeowners have already surpassed the average tenure of 15 years, suggesting that a substantial portion of the existing homeowner base may be ready to sell when rates moderate. This pent-up inventory, combined with strong demand, could create a dynamic market in 2024.
Houston, Texas
The third Texas market to make the list, Houston, benefits from a robust economy, strong wage growth, and favorable housing affordability. Twenty-four percent of renters in Houston can afford a median-priced home, significantly higher than the national average. What’s particularly noteworthy is the fourfold increase in wages in Houston compared to the national level, outpacing even the strong job growth the city has experienced.
This combination of affordability and rapidly rising incomes makes Houston a prime candidate for a housing market boom in 2024. While the rate lock-in effect may temper some inventory, the underlying economic fundamentals are exceptionally strong. Houston’s diverse economy and relatively lower cost of living compared to other major metros continue to attract residents and fuel housing demand.
Nashville, Tennessee
Nashville, known for its vibrant music scene and growing economy, is also poised for a housing market resurgence. While only 13.8% of renters currently afford a median-priced home, the anticipated return of buyers when rates fall presents a significant opportunity. The market is attracting high-earning Millennials, further boosting demand.
However, Nashville faces a notable challenge: a shortage of listings in the price range that first-time buyers can afford. This supply-demand imbalance could keep prices elevated even as sales volume increases. The city’s strong job market and growing appeal as a lifestyle destination suggest that demand will remain robust, but addressing the affordability gap will be crucial for sustained growth.
Philadelphia, Pennsylvania
Philadelphia is set to experience a significant boost in market activity as the rate lock-in effect begins to ease. A substantial 44% of homeowners in this market have surpassed the average tenure of 17 years, indicating a potential wave of listings as these homeowners decide to move. This pent-up supply could be a major catalyst for market activity.
Additionally, Philadelphia offers more affordable purchase options for first-time buyers compared to many other major markets. With 21.5% of renters able to afford a median-priced home, and 4.7% of households positioned to re-enter the market if rates fall, Philadelphia has the makings of a vibrant market in 2024. The city’s rich history, cultural attractions, and improving economic outlook make it an increasingly attractive destination.
Portland, Maine
Portland, Maine, stands out for attracting a high number of high-earning Millennial renters, second only to San Jose. The city also boasts the lowest violent crime rate among the 100 largest metro areas, making it an appealing place to live. However, Portland faces a significant challenge with fewer than 10% of listings being affordable for first-time buyers.
Despite this affordability hurdle, the potential for inventory growth is substantial. With about 42% of homeowners having exceeded the average tenure, there’s a significant pool of sellers who may be ready to list their homes when rates moderate. If this inventory comes to market, combined with the strong demand from relocating professionals, Portland could see a significant increase in housing activity.
Washington, DC/Arlington/Alexandria, Virginia
This metro area, a hub of government and related industries, is experiencing a shift in work patterns that is expected to drive market activity. The proportion of remote workers witnessed a significant decline, falling by 21 percentage points in 2022. This trend is expected to continue, bringing more workers back to offices and increasing demand for housing.
While only 15.8% of renters can afford a median-priced home, and 4.8% of households are positioned to re-enter the market if rates fall, the return of workers could provide a significant boost. Furthermore, one in five listings in this market falls within the budget range for first-time buyers, offering some relief. The area’s strong job market and status as a major economic center provide a solid foundation for housing market recovery.
The Outlook for 2024
The National Association of Realtors’ forecast for 2024 paints a picture of a housing market in recovery. The key driver is the anticipated decline in mortgage rates, which will unlock pent-up demand from both buyers and sellers. While challenges remain—particularly concerning housing affordability and inventory levels—the
