These Will Be the 10 Hottest Real Estate Markets in the US as Home Sales Surge in 2024, According to the National Association of Realtors
The National Association of Realtors predicts a significant rebound in the US housing market in 2024, with falling mortgage rates expected to bring buyers back into the fold after two relatively quiet years. This shift is anticipated to create windfalls for realtors, as well as price gains for sellers, with new home sales projected to rise 19% and existing property sales climbing 13%.
To identify the metropolitan areas poised to benefit most from this pent-up demand, the NAR analyzed 10 factors across the 100 largest US markets. These factors included 2023 home price growth, the percentage of renters who can afford a median-priced home, the share of potential buyers who may re-enter the market if mortgage rates drop to 6.5%, job growth, income growth, and crime rates.
Here are the 10 cities identified by the NAR as having the most pent-up demand, with the potential for explosive housing market activity 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: 5.1%
Commentary: Austin stands out for having one of the largest pools of potential “returning\” buyers. If interest rates decline to 6.5% in 2024, an estimated 5.1% of all households in the area will once again have the financial capacity to purchase a median-priced home. Despite persistent housing cost challenges, the market is experiencing a notable trend of high-earning Millennials (earning over $100,000) relocating from other states. While Austin’s housing prices appear sensitive to market shifts, the combination of this influx of affluent Millennial renters and the pool of returning buyers is expected to invigorate the local housing market. Early indicators from the Austin Board of Realtors already suggest a positive turnaround in home sales activity.
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: 4.9%
Commentary: Among the 100 largest metropolitan areas, Dallas boasted the second-fastest-growing job market. The local economy successfully generated more than 4% additional jobs compared to the previous year. With 22% of renters currently able to afford a median-priced home, housing activity is anticipated to increase as mortgage rates decline 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: 4.7%
Commentary: Dayton offers not only affordability but also a wealth of purchasing opportunities for first-time buyers. These buyers can afford to purchase more than half of the listings available in the market. Furthermore, the robust job market in this area is likely to enable more renters to transition into homeownership next year.
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: 5.6%
Commentary: The Research Triangle region is a significant contender, with the Durham metro area leading in the highest proportion of \”returning\” buyers, representing 6% of households that could regain affordability with lower rates. Although this area faces a scarcity of affordable listings for first-time buyers, wage growth has been substantial, with average earnings increasing by 13 percentage points year-over-year.
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: 5.3%
Commentary: This region is already affordable for over 30% of its renters and is also attracting high-earning renters from other states. With the anticipated decrease in mortgage rates next year, both inventory levels and buying activity are expected to expand further as existing homeowners decide to list their properties. Notably, 42% of homeowners in Harrisburg have already surpassed the average tenure of 15 years for the area.
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: 4.3%
Commentary: The third area within the Texas Triangle to make this list, Houston is poised for increased activity in 2024, driven by its affordability, strong job market, and wage growth. While housing affordability for renters in Houston exceeds that of most markets nationwide, the most remarkable statistic is the fourfold increase in wages, which surpasses the national average.
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: 4.6%
Commentary: The anticipated resurgence of \”returning\” buyers is expected to fuel market growth in Nashville in 2024. Concurrently, a robust job market is attracting numerous Millennials earning over $100,000. However, this area confronts a significant shortage of listings in price ranges accessible to first-time buyers.
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 Mortgage Rates Fall: 4.7%
Commentary: This market is set for a boost, propelled by pent-up demand from both buyers and sellers, as the rate lock-in effect begins to subside next year. A notable 44% of homeowners have exceeded the 17-year mark, which is the average tenure in this region. For first-time buyers, the availability of affordable purchase options in Philadelphia is twice as plentiful compared to most other areas across the country.
Portland, Maine
2023 Home Price Growth: 12.3%
Share of Renters Who Can Afford a Median-Priced Home: 20.2%
Share of Returning Buyers If Mortgage Rates Fall: 4.9%
Commentary: Following San Jose, Portland attracted the second-highest number of Millennial renters earning over $100,000. This area also recorded the lowest violent crime rate among the 100 largest metropolitan areas. Despite these positives, fewer than 10% of listings are within the financial reach of first-time buyers. Nevertheless, with approximately 42% of homeowners having surpassed the average tenure, there is potential for an increase in inventory as these rate-locked sellers list their homes on the market.
Washington, D.C.; Arlington/Alexandria, Virginia
2023 Home Price Growth: 3.4%
Share of Renters Who Can Afford a Median-Priced Home: 15.8%
Share of Returning Buyers If Mortgage Rates Fall: 4.8%
Commentary: This region is recognized for having a substantial teleworking population; however, the proportion of remote workers experienced a significant decrease, plummeting by 21 percentage points in 2022. This reduction in remote work is expected to drive increased market demand as individuals return to their offices. One in every five listings in this area falls within the budget range for first-time buyers.
These 10 markets, each with its unique dynamics of affordability, job growth, and buyer demographics, represent the front lines of the anticipated 2024 housing market resurgence. As mortgage rates moderate, the pent-up demand in these areas is expected to unleash a wave of transactions, reshaping local real estate landscapes and creating significant opportunities for those positioned to capitalize on the shift.
