According to a new Realtor.com forecast, mortgage rates should start to slow—if not decline—in 2024, a welcome decline, leading Realtor.com to reidentify local housing markets ripe and ready for growth next year.
These are the markets with the largest likelihood of seeing the strongest combined increase in home sales and listing prices in the coming year:
Mainly located in Southern California, the Northeast, and the Midwest, this year's top 10, in rank order, are Toledo, Ohio, Oxnard-Thousand Oaks-Ventura, California; Rochester, New York; San Diego-Chula Vista-Carlsbad, California; Riverside-San Bernardino-Ontario, California; Bakersfield, California; Springfield, Massachusetts; Worcester, Massachusetts/Connecticut; Grand Rapids-Kentwood, Michigan; and Los Angeles-Long Beach-Anaheim, California.
Most of this year's Top Markets offer relative affordability compared to the national median home price—especially in the Midwest and Northeast. In California, where five of the top 10 metro areas are located, markets are forecast to rebound from a tough 2023 even as sales levels remain historically low.
New research from Realtor.com, even faced with the challenging homebuying landscape, almost half of first-time home buyers (49%) think buying is a better option than renting in 2024, and three-quarters (76%) think the dream of home ownership is still possible to achieve.
Additionally, first-time home buyers looking to buy a home in the next 12 months have been saving for a little over two years on average. In fact, they have been putting away around $800/month and nearly all of them (95%) feel that they'll be able to afford a home within their lifetime, with 40% saying they'll be able to afford it within the next year.
Among the top 100 metropolitan areas, sales price growth is expected to outpace the national average in these cities in 2024; in these top-100 cities, prices are expected to rise by an average of 1.2%, compared to a 1.7% decline nationwide. Home sales in the 100 biggest markets will decline an estimated 2.2%, while nationwide, sales will remain relatively stable (+0.1%).
"Now that we're seeing the beginning of an affordability turnaround, home buyers are still looking for markets where they can capitalize on lower prices," says Realtor.com Chief Economist Danielle Hale. "Even in some of the more expensive markets, we'll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent."
Midwestern and Northeastern top markets are more affordable, with all of the top five markets in those areas except for Worcester, Mass., showing median listing prices lower than the national average. In these areas, 37.9% of homeowners live in homes without a mortgage, which insulates them from the impact of higher interest rates. Their local economies are fueled by education, healthcare and manufacturing, which, with the exception of Toledo, are projected to have strong enough job growth to keep unemployment below the estimated national average of 4.2% at the end of 2024. These areas also have a high quality of life, with recreation, culture and education that's appealing to homeowners.
Click here to view the list of the top 100 cities poised for growth, including more insights from Realtor.com