A stubborn lack of inventory and high mortgage rates kept many prospective homebuyers at bay for most of 2023. Homeowners are reluctant to sell their homes due to the sub-5% mortgage interest rates, resulting in a significant decline in existing home sales. However, experts believe that 2024 could be the year when the housing market takes a turn for the better.
Increased Sales and Listing Prices
Which markets are poised to see the strongest combined increase in home sales and listing prices in the coming year? According to an analysis by Realtor.com, five of the top 10 metro areas for 2024 are in Southern California. These markets are projected to experience an average sales growth of 13.1%, while other California areas may face a decline of 4.1%. The remaining five markets offer relative affordability compared to the national median home price, particularly in the Midwest and Northeast regions.
Realtor.com Chief Economist Danielle Hale states, "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." With mortgage rates expected to drop further, sales are anticipated to rebound from their historic lows.
Homeownership without a Mortgage
The top markets in Midwestern and Northeastern states are more affordable, with median listing prices below the national average. In these areas, 37.9% of homeowners live in homes without a mortgage, protecting them from the impact of higher interest rates. Their local economies are fueled by industries such as education, healthcare, and manufacturing, which are projected to have strong job growth. Additionally, these areas offer a high quality of life, with recreational, cultural, and educational opportunities that appeal to homeowners.
The California Dichotomy
Interestingly, although California is known for its booming real estate market, none of the top five California metros for 2024 are in the Bay Area or Northern California. The top five Californian metros are Oxnard, San Diego, Riverside, Bakersfield, and Los Angeles. These areas are expected to experience sales growth of 13%, on average, in 2024, compared to other Californian metros in the top 100, which may face a decline of 4%. Despite these improvements, sales in these California metros are still predicted to be at historically low levels.
The Top 10 Housing Markets for 2024
- Toledo, Ohio
- November 2023 median home price: $200,000
- Forecasted 2024 home sales change: +14%
- Forecasted 2024 home price change: +8.3%
- Forecasted 2024 combined sales and price change: +22.3%
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Oxnard, California
- 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%
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Rochester, New York
- 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%
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San Diego
- 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: +16.3%
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Riverside, California
- 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%
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Bakersfield, California
- 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%
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Springfield, Massachusetts
- 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%
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Worcester, Massachusetts
- 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%
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Grand Rapids, Michigan
- 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%
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Los Angeles
- 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%
These top 10 real estate markets for 2024 offer opportunities for homebuyers to take advantage of lower prices and potential sales growth. With mortgage rates expected to decrease further, it may be a good time to consider buying a house. Keep an eye on these markets and explore the possibilities they offer.
About the Author: Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. For more updates and insights, you can follow her on Twitter @SwapnaVenugopal.