Homebuyers are moving away from the expensive and big cities, and the smaller, less expensive markets are flourishing.
According to a report by CNBC [1], which uses data from realtor.com, Zip codes from Grand Rapids, Michigan (49505); Omaha, Nebraska (68144); and Boise, Idaho (83704) are among the hottest Zip codes in the nation.
Joining those markets are: Shawnee, Kansas (66203); Rochester, New York (14609); Livonia, Michigan (48154); Melrose, Massachusetts (02176), Arlington, Texas (76018); Goffstown, New Hampshire (03045); and Colorado Springs (80916).
The report by CNBC states it takes an average of 17 days for homes to sell in these Zip codes—40 days faster than the rest of the nation.
“Even though buyers are moving to smaller markets, they are looking to retain an urban lifestyle by living closer to the city center,” said Danielle Hale, Chief Economist at realtor.com. “This tells us that today’s home buyers are trying to have it all—proximity to downtown, room to grow, and affordability--and they’re finding it outside of the biggest cities in the U.S.”
Average commute distances from the hottest Zip codes to downtown areas is nine miles, which four miles closer compared to last year’s top-10 list.
The report also states affordability, high-earning millennials, and low unemployment are all factors for certain markets becoming popular among homebuyers.
CNBC states millennials in these markets earn 13% more on average than millennials working in other markets. Home prices in these Zip codes average $272,000, which is below the national average.
Affordability, according to new data from Black Knight, may be improving nationwide, as it latest Mortgage Monitor Report [2] revealed falling interest rates and slowing home price growth has caused affordability to reach an 18-month high.
“For much of the past year and a half, affordability pressures have put a damper on home price appreciation,” said Black Knight Data & Analytics President Ben Graboske. “Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably. In November 2018—when rising interest rates hit a seven-year high and home price growth fell by half a percent in a single month—it took 23.3% of the median household income to make the principal and interest payments when purchasing the average-priced home. As 30-year rates fell to 3.75%, that share fell to 21.3%, the lowest it’s been in 18 months."