The 10 Hottest Real Estate Markets Poised for a Surge in 2024, According to the National Association of Realtors
The housing market is on the cusp of a dramatic turnaround after a tumultuous couple of years, according to the latest analysis by the National Association of Realtors (NAR). Following a historic slump in 2023, when sales plummeted by an estimated 18%—the steepest decline in at least 15 years—the market is bracing for a significant rebound. Fewer than four million homes are expected to change hands in 2023, marking the lowest level since 2010, just before the post-financial crisis recovery began.
This dramatic slowdown was largely driven by a punishing combination of high demand and historically low inventory. Prospective buyers were pummeled by the highest mortgage rates in decades, with the 30-year fixed mortgage rate peaking near 7.8% in late October 2023 as interest rates skyrocketed. This surge in borrowing costs squeezed affordability to its lowest point in years, sidelining millions of potential buyers.
Surprisingly, this weaker demand did not translate into lower home prices. Instead, sale values continued to climb as a severe housing shortage kept inventory tight, adding insult to injury for financially stressed buyers. The lack of available homes meant that even as fewer people could afford to buy, prices remained stubbornly high due to basic supply and demand dynamics.
However, 2024 is shaping up to be a very different story, offering a reason for optimism across the entire housing ecosystem—from buyers and sellers to realtors and developers. The NAR projects a significant easing of mortgage rates, with the average 30-year fixed rate expected to fall to around 6.3% by next year. While still elevated compared to the historic lows of 2020-2021, this represents a marked improvement that could unlock pent-up demand.
The driving force behind this projection is the Federal Reserve’s anticipated shift in monetary policy. The NAR expects the Fed to cut interest rates four times in 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 researchers noted in their report. “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.”
This dual impact—more buyers entering the market and more sellers listing their properties—could create a virtuous cycle, reigniting activity across the country. Improvements in affordability are expected to fuel a resurgence in housing market activity, with the NAR forecasting that new home sales will rise 19% and existing home sales will grow 13% in 2024. These increases would translate into substantial windfalls for realtors and bring much-needed relief to buyers. Furthermore, the NAR predicts that sellers will also enjoy home price gains, albeit more moderate ones, as demand catches up with supply.
To identify the markets most likely to benefit from this historic turnaround, the NAR compiled a list of 10 metropolitan areas that are currently sitting on the most pent-up demand. These “sleeping giants” are expected to see a surge in home transactions after a period of relative dormancy. The NAR’s analysis considered 10 factors across the 100 largest U.S. markets, including home price growth in Q3 2023, the share of renters who could afford to buy a median-priced home, and the percentage of buyers who might re-enter the market if rates fall to 6.5%. Additional considerations included job growth, income growth, and crime rates, providing a comprehensive picture of each market’s underlying health and potential.
Here are the 10 markets the NAR has identified as poised for a dramatic rebound in 2024:
Austin, Texas
Despite experiencing a -7.7% home price decline in 2023, Austin remains one of the most dynamic markets in the country. The city boasts one of the largest pools of “returning” buyers, with 5.1% of households expected to re-enter the market if rates drop to 6.5%. While housing costs remain a challenge, Austin continues to attract high-earning Millennials from other states, with a notable influx of those making over $100,000 annually. This demographic trend, combined with the return of sidelined buyers, is anticipated to fuel significant growth in the local housing market. According to the Austin Board of Realtors, home sales activity has already shown a positive turnaround, signaling that the city is ready to surge forward.
Dallas, Texas
Dallas stands out with the second-fastest growing job market among the 100 largest metros, having created over 4% additional jobs compared to the previous year. This robust economic backdrop, coupled with 22% of renters being able to afford a median-priced home, creates a fertile ground for increased housing activity as mortgage rates decline. The combination of strong job growth and improving affordability positions Dallas as a prime candidate for a significant market rebound in 2024.
Dayton, Ohio
Dayton offers a compelling combination of affordability and opportunity, particularly for first-time buyers. More than half of the listings in this market are within reach for these buyers, and the strong local job market will further enable more renters to transition to homeownership. Dayton’s blend of affordability and economic vitality makes it a prime candidate for a surge in housing demand as buyers seek value and opportunity.
Durham/Chapel Hill, North Carolina
The Research Triangle region continues to be a powerhouse of economic activity, with Durham/Chapel Hill leading the charge. This area boasts the highest share of “returning\” buyers, with 6% of households gaining the ability to afford a median-priced home if rates fall. While affordable listings for first-time buyers are currently scarce, tremendous wage growth—with average earnings rising by 13 percentage points—is expected to bridge the affordability gap and fuel significant market activity.
Harrisburg, Pennsylvania
Harrisburg is already affordable for over 30% of its renters and is also attracting high-earner renters from other states. As mortgage rates decline in 2024, both inventory and buying activity are expected to grow further, driven by existing homeowners selling their homes. Notably, 42% of homeowners in the area have already surpassed the average tenure of 15 years, indicating a significant pool of sellers ready to re-enter the market.
Houston, Texas
Rounding out the Texas Triangle, Houston is poised for a strong 2024 thanks to its affordability and robust job and wage growth. Housing affordability for renters in Houston surpasses that of most markets across the country, and the noteworthy fourfold increase in wages—outpacing the national level—is expected to significantly boost market activity. This combination of affordability and economic strength positions Houston for a substantial rebound.
Nashville, Tennessee
The anticipated resurgence of \”returning\” buyers will also drive market growth in Nashville. A strong job market continues to attract many Millennials earning over $100,000 annually, further fueling demand. However, the city faces a severe shortage of listings in the price range that first-time buyers can afford. Despite this inventory challenge, the influx of high-earning renters and the return of sidelined buyers are expected to generate significant activity in 2024.
Philadelphia, Pennsylvania
Philadelphia is set to experience 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 this area have surpassed the 17-year mark, representing a significant pool of potential sellers. Furthermore, first-time buyers in Philadelphia have twice as many affordable purchase options compared to most other areas across the country, creating a strong foundation for a market rebound.
Portland, Maine
Following San Jose, Portland attracted the most Millennial renters earning over $100,000, and it also boasts the lowest violent crime rate among the 100 largest metro areas. While fewer than 10% of listings are currently within reach for first-time buyers, about 42% of homeowners have exceeded the average tenure, suggesting a potential increase in inventory as these rate-locked sellers list their homes. This combination of high-earning newcomers and potential inventory from existing homeowners positions Portland for a significant surge.
Washington, DC; Arlington/Alexandria, Virginia
This metro area, known for its high teleworking population, witnessed a significant decline in remote work in 2022, with the proportion of remote workers plummeting by 21 percentage points. This expected return to offices is anticipated to drive increased demand in the market. Additionally, one in five listings in this area falls within the budget range for first-time buyers, creating a strong foundation for a rebound as workers return to the city.
The Path Forward for 2024
The NAR’s analysis paints a compelling picture of a housing market on the verge of a significant turnaround. After a historic downturn, the combination of falling mortgage rates, improving affordability, and pent-up demand is expected to reignite activity across the country. The 10 markets identified above are particularly well-positioned to benefit from this shift, thanks to their unique combinations of economic strength, demographic trends, and housing market dynamics.
For buyers, 2024 represents a critical window of opportunity. As mortgage rates decline and inventory increases, the market is expected to become more favorable for those who have been sidelined by affordability challenges. The key will be to act decisively when
