With some affordability relief in sight next year as sale prices and mortgage rates start a slow, yet welcome decline, Realtor.com has identified the local housing markets across the U.S. that are primed and ready for growth in its 2024 Top Housing Markets forecast. These markets are poised to see 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, Calif., Rochester, N.Y., San Diego-Chula Vista-Carlsbad, Calif., Riverside-San Bernardino-Ontario, Calif., Bakersfield, Calif., Springfield, Mass., Worcester, Mass.-Conn., Grand Rapids-Kentwood, Mich., and Los Angeles-Long Beach-Anaheim, Calif.
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.
According to 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 per 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.
Across the nation's largest 100 metropolitan areas, sales price growth is expected to outpace the national average in 2024. Median sales prices in the 100 largest metros 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."
Affordability Drives Northeast and Midwest Top Markets
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.
What's Going on in California?
Five of this year's top 10 metro areas are in Southern California, which is projected to perform better than the state as a whole. These markets will see estimated average sales growth of 13.1% in 2024, compared to a sales decline of 4.1% for other California areas in the top 100. While sales will be higher than in 2023, sales in the top five California markets are still 20%-35% lower than in a typical year before the pandemic in 2017-2019. And these markets are more sensitive to shifts with mortgage-rate changes, given that only 31.6% of homeowners in these Southern California markets don't have a mortgage.
Wild Cards Include Economy, Mortgage Rates
So far, the national labor market has remained strong even in the face of the Federal Reserve's interest-rate increases. In Northeastern and Midwestern top markets, housing market growth could be at risk if unemployment rises above expectations, or if dominant sectors including education, healthcare, manufacturing, and government see weak job creation. In California, growth in home sales in the top five markets will depend on a gradual easing of mortgage rates to a predicted 6.5% by the end of 2024. If inflation takes longer to temper and mortgage rate declines stall or reverse, those markets could see home sales flatten or dip.
Realtor.com 2024 Top Housing Markets
Toledo, Ohio
- November 2023 median home price: $200,000
- Forecasted 2024 home sales change: +14.0%
- Forecasted 2024 home price change: +8.3%
- Forecasted 2024 combined sales and price change: +22.3%
Oxnard et al, Calif.
- November 2023 median home price: $1,037,000
- Forecasted 2024 home sales change: +18.0%
- Forecasted 2024 home price change: +3.3%
- Forecasted 2024 combined sales and price change: +21.3%
Rochester, NY
- November 2023 median home price: $239,000
- Forecasted 2024 home sales change: +6.2%
- Forecasted 2024 home price change: +10.4%
- Forecasted 2024 combined sales and price change: +16.6%
San Diego et al, Calif.
- November 2023 median home price: $995,000
- Forecasted 2024 home sales change: +11.0%
- Forecasted 2024 home price change: +5.4%
- Forecasted 2024 combined sales and price change: +16.4%
Riverside, et al Calif.
- November 2023 median home price: $585,000
- Forecasted 2024 home sales change: +13.8%
- Forecasted 2024 home price change: +2.0%
- Forecasted 2024 combined sales and price change: +15.8%
Bakersfield, Calif.
- November 2023 median home price: $385,000
- Forecasted 2024 home sales change: +13.4%
- Forecasted 2024 home price change: +2.3%
- Forecasted 2024 combined sales and price change: +15.7%
Springfield, Mass.
- November 2023 median home price: $350,000
- Forecasted 2024 home sales change: +10.5%
- Forecasted 2024 home price change: +4.2%
- Forecasted 2024 combined sales and price change: +14.7%
Worcester, Mass.-Conn.
- November 2023 median home price: $475,000
- Forecasted 2024 home sales change: +9.1%
- Forecasted 2024 home price change: +4.8%
- Forecasted 2024 combined sales and price change: +13.9%
Grand Rapids et al, Mich.
- November 2023 median home price: $390,000
- Forecasted 2024 home sales change: +6.1%
- Forecasted 2024 home price change: +7.2%
- Forecasted 2024 combined sales and price change: +13.3%
Los Angeles et al, Calif.
- November 2023 median home price: $1,150,000
- Forecasted 2024 home sales change: +9.2%
- Forecasted 2024 home price change: +3.5%
- Forecasted 2024 combined sales and price change: +12.7%
