The housing market has been bleak all across the U.S. for the past couple of years, but, according to Realtor.com, there’s hope on the horizon. The site’s 2024 National Housing Forecast predicts that housing affordability will begin to turn around as mortgage rates ease and home prices dip. In another report, Realtor.com identified the housing markets that are expected to have the strongest rebounds from the significant sales declines of 2023.
Realtor.com ranked the largest 100 metros by their expected sale and price growth rates and came up with the top 10 areas for 2024—all of which are in the Midwest, Northeast, or Southern California. While the same criterion was used to identify all of the markets on the list, the report notes that the top markets are being driven by two distinct trends. In Midwestern and Northeastern metropolitan areas, the driving factor is “affordability in what has become a very expensive national housing market.” In Western metros, however, it’s the areas which “took a big hit in 2023 and are expected to bounce back as interest rates fall over the year.”
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Learn more about the top housing markets for 2024—and what we can learn about them—below.
Top Housing Markets for 2024
- Toledo, Ohio
- Oxnard-Thousand Oaks-Ventura, Calif.
- Rochester, N.Y.
- San Diego-Chula Vista-Carlsbad, Calif.
- Riverside-San Bernardino-Ontario, Calif.
- Bakersfield, Calif.
- Springfield, Mass.
- Worcester, Mass.-Connecticut
- Grand Rapids-Kentwood, Mich.
- Los Angeles-Long Beach-Anaheim, Calif.
Why Midwestern and Northeastern Markets Are at the Top
According to Realtor.com, the Midwestern and Northeastern metros on the list are primarily there because the cities “offer affordable housing options in comparison to larger urban centers, making homeownership more attainable.” The site even found that as of October 2023, all of these metro areas—except for Worcester, Mass.—had median listing prices below the national average. (However, Worcester was still 41.8 percent less expensive than the nearby Boston metro area, where much of the cities’ out-of-town home searchers are from.)
The report also notes that Midwestern and Northeastern metros are less sensitive to the impact of higher mortgage rates, since a higher proportion of homeowners in these areas live in housing units without a mortgage. Among the top 10 housing markets, Toledo, Ohio has the highest share (41.2 percent) of homeowners who own their homes outright, followed by Rochester, N.Y. (39.8 percent), and Grand Rapids, Mich. (38.4 percent).
Quality of life is another factor that placed these metros in the top, with a range of recreational, educational, and employment opportunities. In fact, according to the report, unemployment in each of these areas (aside from Toledo) is expected to meet or be lower at the end of 2024 than the national rate of 4.2 percent.
Why Southern California Markets Are at the Top
While the top Southern California metros aren’t ranking as well in terms of affordability, they’re “expected to have sales growth of 13.1 percent, on average, in 2024, compared to an average decline of 4.1 percent for other Californian metros in the largest 100 list.”
Growth is growth, but the context here is important to understand. Despite the significant improvement from 2023 numbers, these top California metros (Oxnard, San Diego, Riverside, Bakersfield, and Los Angeles) are still predicted to have historically low sales levels. “Mirroring national figures expected to total roughly 25 percent below 2017-2019 norms, sales in these Californian metros are also expected to be 20 percent to 35 percent lower than the typical pre-pandemic year in 2017 to 2019,” the report states.
Compared to Midwestern and Northeastern metros, these Southern California markets are more sensitive to the impact of elevated mortgage rates and rising interest rates. However, the report explains that government-backed mortgage products could help buyers secure homes in these markets. “During the period spanning January to August 2023, FHA loans, specifically designed to assist first-time or minority homebuyers, played a substantial role, accounting for 15.8 percent of all mortgaged sales in these top markets,” the report states. “Notably, Bakersfield, Calif., stood out with the highest share of FHA purchases at 26.7 percent, followed by Riverside, Calif., at 22.9 percent. In the broader context, the prevalence of FHA loans among mortgaged purchases averaged 15.0% in the largest 100 markets.”
During the same time period, San Diego emerged as a leader with a 16.5 percent share of VA loans, nearly double the largest 100 market average of 9.1 percent.
These Market Changes Don’t Mean Back to “Normal”
It’s important to note that these findings and predictions don’t imply that we’re heading back to a pre-pandemic market. Among the full set of 100 metros forecast, the report explains, only three metros are expected to have sales above the rate seen in the years immediately before the pandemic: Scranton, Pennsylvania (ranked 13); Toledo, Ohio (1); and El Paso, Texas (14). “In recent history, these metros have been less prone to extreme boom and bust cycles and their growth was fairly modest in pre-pandemic and even pandemic-peak periods,” the report states.
You can find the full report on Realtor.com’s top housing markets here.