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Top Housing Markets for 2024: Which Metros Will Experience Growth?

CEO Khai Intela
As we look ahead to 2024, the housing market is expected to experience some changes. While the national housing affordability is projected to improve with easing mortgage rates and a dip in home prices, certain...

As we look ahead to 2024, the housing market is expected to experience some changes. While the national housing affordability is projected to improve with easing mortgage rates and a dip in home prices, certain markets across the country will fare differently. These markets will witness significant sales growth, with price growth also playing a role, albeit to a lesser degree.

Top Markets Could See Double-Digit Growth as Some Areas Rebound From Lows

Eight metros are predicted to break double-digit sales growth in 2024, primarily expensive markets in the West that saw significant sales declines in 2023. These metros include Oxnard, CA; Toledo, OH; Riverside, CA; Bakersfield, CA; Las Vegas, NV; San Diego, CA; Springfield, MA; and Sacramento, CA. Although their sales levels will be below the heightened activity of 2021-2022 and the pre-pandemic period of 2017-2019, they are expected to rebound from the lows of 2023.

Top Housing Markets Image Source: Unsplash

We have ranked the largest 100 metros based on their expected sale and price growth rates. The top 10 metropolitan areas that have emerged for 2024 are:

  1. Toledo, OH
  2. Oxnard-Thousand Oaks-Ventura, CA
  3. Rochester, NY
  4. San Diego-Chula Vista-Carlsbad, CA
  5. Riverside-San Bernardino-Ontario, CA
  6. Bakersfield, CA
  7. Springfield, MA
  8. Worcester, MA-CT
  9. Grand Rapids-Kentwood, MI
  10. Los Angeles-Long Beach-Anaheim, CA

Some Markets Poised to Repeat Top Performance

Toledo, Grand Rapids, and Worcester also appeared on our list of top predicted housing markets for 2023 and are projected to finish in the top rankings for 2024 as well. While Worcester slightly underperformed compared to initial expectations, it remains one of the hottest markets in the country. Rochester and Springfield also made the top list of larger housing markets that showed significant improvement in our previous reports.

Affordability Propels Sales and Price Growth in Top Markets in the Midwest and Northeast

The Midwest and Northeastern metros share common factors that make them attractive housing markets. They offer affordable housing options compared to larger urban centers, making homeownership more attainable. These markets generally have a higher proportion of homeowners residing in housing units without a mortgage, providing insulation from the impact of higher mortgage rates.

Additionally, these metros provide a high quality of life with cultural amenities, recreational opportunities, and educational institutions. Education and healthcare sectors play a significant role in the local economy, making these areas appealing for individuals and families seeking a well-rounded, cost-effective, and vibrant lifestyle.

Toledo, OH

Affordability reigns in Toledo, with a median home listing price significantly lower than the national average. The region offers a cost-effective housing market with various options, making it appealing to first-time buyers and families. Toledo is known for its welcoming and close-knit communities, high-quality of life, cultural amenities, and recreational activities.

Rochester, NY

Rochester stands out for its affordability, strong job market, and high quality of life. The region offers cost-effective housing options and a diverse economy with opportunities in healthcare, education, government, and manufacturing. Rochester boasts a thriving arts and cultural scene, numerous parks, and access to the stunning Finger Lakes region.

Springfield, MA

Springfield, MA, is an attractive place for homebuyers due to its affordable housing market, proximity to major cities like Boston, and quality of life. The region offers cultural amenities, parks, recreational opportunities, and a strong sense of community. Springfield is home to respected educational institutions and thriving sectors such as healthcare, education, government, and manufacturing.

Worcester, MA-CT

The Worcester metro area attracts homebuyers with its affordable housing options, convenience to major cities like Boston, and high quality of life. The region's diverse economy, strong education institutions, and transportation infrastructure enhance its appeal. Despite being slightly more expensive than the national median, Worcester offers a cost-effective alternative to the nearby Boston metro area.

Grand Rapids-Kentwood, MI

Grand Rapids offers a blend of affordability, a strong job market, and a vibrant quality of life. The region provides a relatively low-cost housing market and a diverse economy with opportunities in manufacturing, healthcare, and technology industries. Grand Rapids is known for its dynamic arts and cultural scene, recreational activities, and family-friendly communities.

Southern California Looks More Sunny in 2024

Interestingly, among California metros, the top five markets that made our list of top housing markets for 2024 are not from the Bay Area or Northern California. The top five Californian metros include Oxnard, San Diego, Riverside, Bakersfield, and Los Angeles. These markets are expected to experience significant sales growth in 2024 compared to other Californian metros.

Although these top California markets will still have historically low sales levels despite improvements over depressed 2023 numbers, they are more sensitive to the impact of elevated mortgage rates. Many homeowners in these areas have mortgages, and their sales are expected to be 20% to 35% lower than the typical pre-pandemic years.

However, the utilization of government-backed mortgage products, such as FHA loans and VA loans, can help buyers safely enter these competitive markets and secure homes with lower down payments and more favorable mortgage rates.

Key Wildcards

While the housing markets for the top Northeastern and Midwestern metros are expected to show strength in 2024, any unexpected increase in unemployment or prolonged effects of inflation could impact the forecast. Additionally, mortgage rates play a vital role in these markets, and any significant changes could affect buyer plans.

Large Metros Expected to Outperform in Price Growth, Underperform in Sales

Looking at the 100 largest metropolitan areas, we can expect median existing home sale price growth to outpace the national rate, while sales are expected to decline. The stability in prices is mainly due to low inventory, while the labor market's strength has supported home sale prices. However, sales in these metros are predicted to underperform even the national rate of decline.

Boosted by Strong Labor Markets, Northeastern Metros Are Expected to Outperform in Sales and Price Growth

Northeastern large metros are expected to show sales growth in 2024, with strong local economies driving the housing market forward. These markets are projected to have sales lower than the pre-pandemic period but still experience growth compared to other regions. The Midwest and South will see declines in sales, while Western metros are expected to have price declines.

Few Markets See Sales Activity Back to Pre-Pandemic Norms

Among the 100 metros forecasted, only a few are expected to have sales above the rate seen before the pandemic. These markets have been less prone to extreme boom and bust cycles and have shown modest growth even during the pandemic.

Sales Growth Faster in Markets with Less Flexible Work Modes

Flexible work options, such as remote work arrangements, have significantly impacted home buying decisions. Markets with less flexible work arrangements are predicted to show year-over-year growth in existing home sales, while markets with more flexible work modes are expected to experience a decline in sales. This trend is attributed to home shoppers confined to local searches due to work constraints.

As we head into 2024, the housing market is set to experience growth in certain markets across the nation. Understanding these trends and market dynamics can help buyers and sellers make informed decisions in the ever-changing real estate landscape.

Disclaimer: This article is for informational purposes only. The rankings and forecasts provided are based on model-based estimations and should not be considered as financial or investment advice.