2024’s Hottest Housing Markets: 10 Cities Primed for a Sales Surge as Mortgage Rates Fall
The U.S. housing market is poised for a dramatic turnaround in 2024, with the National Association of Realtors (NAR) forecasting a significant rebound in home sales. After two years of sluggish activity, falling mortgage rates are expected to lure buyers back to the market in droves, creating windfalls for realtors, increased home prices for sellers, and renewed opportunities for hopeful homeowners across the country.
The market has been pummeled by historically high mortgage rates, with the 30-year fixed rate peaking near 7.8% in late 2023. This surge in interest rates, driven by the Federal Reserve’s efforts to combat inflation, sent shockwaves through the housing sector. According to the NAR, home sales were on pace to plummet approximately 18% in 2023, marking the biggest drop in at least 15 years. Fewer than four million homes were expected to change hands for the first time since 2010, just before the recovery from the 2008 financial crisis.
Surprisingly, the drop in demand didn’t lead to a significant decrease in home prices. With inventory levels remaining critically low, sale values continued to climb, exacerbating affordability challenges for buyers. The persistent shortage of available homes, combined with rising interest rates, created a perfect storm that left many potential buyers priced out of the market entirely.
However, the outlook for 2024 is significantly brighter. The NAR projects that the Federal Reserve will implement four interest rate cuts throughout the year, beginning in the spring. This easing of monetary policy is expected to bring the average 30-year fixed mortgage rate down to approximately 6.3%. While still elevated compared to pre-pandemic levels, this represents a marked improvement that will significantly enhance affordability for millions of Americans.
“The decline in mortgage rates is expected to draw more buyers, including those returning to the market, consequently bolstering demand for housing,” 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.”
The impact of these falling rates will be felt across the entire housing ecosystem. New home sales are projected to rise by 19%, while existing home sales are expected to grow by 13%. This surge in activity will create a more robust and dynamic market, benefiting realtors with increased commissions and offering sellers the prospect of continued home price appreciation.
To identify the areas most likely to benefit from this market resurgence, the NAR compiled a list of 10 metropolitan areas with the greatest pent-up demand. These “sleeping giants” have experienced dormant stretches due to market conditions but are now primed for an explosion in home sales as affordability improves.
The 10 Hottest Real Estate Markets Poised for a Boom in 2024
To compile this exclusive list, the NAR analyzed 10 key factors across the 100 largest U.S. metro areas. These factors include the percentage change in home prices during Q3 2023 compared to the previous year, the share of renters who can currently afford to purchase a median-priced home, and the projected share of returning buyers if mortgage rates fall to 6.5% or lower. Additional considerations included job growth rates, income growth trends, and local crime statistics.
Each market on this list represents a unique opportunity, offering a blend of affordability, economic vitality, and pent-up buyer demand that is set to be unleashed in 2024. Here are the 10 cities that are about to experience a housing market boom:
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 Rates Fall: 5.1%
Austin, once the darling of the Texas housing market, experienced a significant correction in 2023 after years of explosive growth. However, the city possesses one of the largest pools of “returning” buyers in the nation. If mortgage rates drop to 6.5% as projected, an additional 5.1% of households in the Austin metro area will regain the financial capacity to afford the median-priced home.
Despite the recent price adjustments, Austin continues to attract high-earning Millennials, particularly those making over $100,000 annually, from other states. While housing costs remain a challenge, this influx of talent, combined with the pent-up demand from returning buyers, is expected to fuel a robust rebound in market activity. The Austin Board of Realtors has already observed a positive turnaround in home sales, signaling the beginning of the anticipated surge.
Why Austin is Primed for a Comeback: The city’s dynamic tech-driven economy, vibrant culture, and relative affordability compared to coastal tech hubs make it a persistent magnet for young professionals. The 2023 price correction has created a buyer’s market, and as rates decline, the pent-up demand from both former residents and new arrivals is set to drive sales to new heights.
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 Rates Fall: 4.9%
Dallas boasts one of the fastest-growing job markets among the nation’s largest metro areas, with an impressive job growth rate exceeding 4% year-over-year. This economic vitality has created a fertile ground for housing market expansion. With 22% of renters already able to afford a median-priced home, any further reduction in mortgage rates will significantly amplify this accessibility.
The combination of a robust job market, rising wages, and improving affordability positions Dallas as a prime beneficiary of the 2024 housing market rebound. The city’s business-friendly environment and diverse economy continue to attract both companies and individuals seeking opportunity.
Why Dallas is Primed for a Comeback: As a major economic hub in the South, Dallas offers a compelling combination of career prospects, cultural amenities, and a relatively lower cost of living compared to its coastal counterparts. The strong job market ensures a steady stream of potential homebuyers, and as mortgage rates decrease, the affordability threshold will continue to fall, unlocking significant pent-up demand.
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 Rates Fall: 4.7%
Dayton stands out as a haven of affordability, offering some of the most accessible housing options for first-time buyers in the country. More than half of all listings in the Dayton market are within reach for entry-level buyers, creating a strong foundation for market activity. When combined with a robust local job market, which empowers more renters to transition to homeownership, Dayton is exceptionally well-positioned for a surge in sales.
The city’s combination of low home prices, strong job growth, and improving affordability makes it an attractive destination for those seeking value and opportunity. The anticipated decline in mortgage rates will further enhance these advantages, unlocking significant pent-up demand from both local residents and out-of-state buyers.
Why Dayton is Primed for a Comeback: Dayton represents the quintessential American comeback story, offering a compelling combination of affordability, economic opportunity, and a high quality of life. The city’s revitalized downtown, growing healthcare sector, and strong manufacturing base provide a stable foundation for housing market growth. As mortgage rates fall, the already attractive affordability profile will become even more compelling, unleashing pent-up demand from first-time buyers and those seeking value.
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 Rates Fall: 5.6%
The famed Research Triangle region, a hub of innovation and education, is home to some of the most dynamic economies in the Southeast. Durham and Chapel Hill, in particular, boast the highest share of “returning\” buyers among the 100 largest metro areas, with a remarkable 6% of households regaining the ability to afford a median-priced home as rates decline.
While the area faces a shortage of affordable listings for first-time buyers, the tremendous wage growth, with average earnings rising by 13 percentage points from the previous year, is rapidly closing this gap. This combination of a highly educated workforce, strong income growth, and pent-up demand positions the Research Triangle for significant housing market activity in 2024.
Why Durham/Chapel Hill is Primed for a Comeback: The Research Triangle is a magnet for talent, driven by world-class universities like Duke and UNC, as well as a thriving technology and research ecosystem. The region’s strong job market, coupled with the influx of high-earning professionals, creates sustained demand for housing. As mortgage rates decrease, the existing affordability challenges will ease, unleashing pent-up demand and driving a surge in sales.
Harrisburg, Pennsylvania
2023 Home Price Growth: 8.5%
Share of Renters Who Can Afford a Median-Priced Home: 32.1%
