The Spring 2024 Wall Street Journal/Realtor.com Housing Market Ranking (2024)

Introduction

Each year as the weather turns warm, the housing market starts to pick up and buyer and seller activity climb. This year kicked off with mortgage rates in the 6.6% range, but rates crept higher towards 7% through the next few months. Still-high mortgage rates kept buyer demand relatively stifled, but sellers were more active. An uptick in for-sale inventory, especially affordable inventory, allowed existing home sales to climb in both January and February, though sales remained below year-ago levels and continued to do so in March.

This year is expected to usher in more balance in the housing market, but with both inflation and employment running hotter than desired, the Fed is likely to push interest rate cuts deeper into the second half of the year. Though mortgage rates do not directly track with the Federal Funds rate, lower inflation will be key in seeing both the Fed rate and mortgage rates move lower. In the meantime, many buyers and sellers are waiting out today’s elevated rates in hopes of lower rates later in the year. Despite stifled housing activity, for-sale inventory has climbed year-over-year for the last five months. We also expect to see the typical seasonal uptick in homes for sale as the Best Time to Sell brings more listings to the market.

Spring 2024 Housing Market Ranking

Today’s home shoppers are faced with still-scarce, though improving, home inventory, and elevated home prices. The housing market has not changed substantially over the last year, which means it is still relatively challenging to purchase a home. The Wall Street Journal/Realtor.com Housing Market Ranking highlights housing markets that offer shoppers a lower cost of living, including for homes, and thriving local economies that are attractive, but not too crowded. This quarter’s top market is affordable, priced almost $200,000 lower than the national median in March. The ranking identifies markets that those considering a home purchase should add to their shortlist–whether the goal is to live in it or rent it as a home to others.

We reviewed data for the largest 200 metropolitan areas in the United States. The Spring 2024 ranking surfaced the following top areas:

Climate-Resilient Housing Markets

More than half of the top 20 markets are in the Midwest. These markets were almost all more affordable than the US median in March and also boast considerable climate resilience. In this quarter’s ranking, we introduced climate data to the ranking parameters, leveraging data provided by First Street that is currently part of the Realtor.com experience. This data captures the share of properties in a given metro that are affected by severe or extreme exposure to any combination of 5 climate risks– extreme heat, wind, air quality, flood and wildfire– over the next 30 years. Nationwide, more than 2 in 5 homes confront at least severe or extreme exposure to at least one of these climate risks.

A recent survey revealed that roughly two-thirds of homeowners are concerned about the threat of natural disasters to homeownership. Areas in the Midwest tend to be less impacted by these risks, giving buyers some peace of mind when taking on a home purchase. In the top ranked market, Rockford, Illinois, just 4.2% of properties are at severe or extreme risk of experiencing one of the 5 risks considered, over the next 30 years. Akron, OH and Appleton, WI boast the most favorable risk share (1.8% of properties) among the top 20 markets, while Kingsport-Bristol, TN has the least favorable risk share (13.9% of properties). On average, 4.4% of properties in the top markets face severe or extreme risk of one or more of the climate factors considered.

Low-Priced Locales Remain Popular

Just 5 of the top 20 markets were priced higher than the U.S. median home for sale in March. Low-priced metros have dominated the list of Hottest Housing Markets over the last couple of years as buyers sought out affordable areas that offered appealing lifestyle amenities. The national median listing price has hovered near the previous year’s level for about a year. Although homebuyer budgets remain stretched, home prices have not fallen on an annual basis since last summer, emphasizing the tension between limited home inventory and sustained buyer demand.

The top markets, however, have seen rapid price growth and inventory depletion due to their popularity, which in turn drives buyer demand higher and quickens the market pace. Despite this price growth, the average listing price among the top 20 markets was more than $60,000 lower than the national median in March. The lowest priced market on the list is Akron, Ohio, where the median listing price was just $210,000 in March, less than half the national median.

Though these areas are largely lower-priced, they boast more amenities than the 200 largest metro average. Amenities are measured as the average number of stores per specific “everyday splurge” category (coffee, upscale/specialty grocery, home improvement, fitness) per capita in an area. Buyers are looking to save without compromising on comforts, and this quarter’s housing markets deliver.

Prices Soar and Inventory Dwindles Relative to Pre-Pandemic

Many of the top-ranked markets have gained significant attention because they offer buyers bang for their buck. That is, these markets have the amenities many buyers are looking for, but at a relatively low price. However, for many of these metros, their popularity picked up enough that home inventory couldn’t keep up. As a result, the number of homes on the market fell and prices rose quickly.

On an annual basis, inventory grew in 15 of the top 20 markets in March. Nationally, there were 23.5% more homes for sale in March 2024 compared to one year earlier. Just 6 of the top 20 markets saw inventory climb faster than the national rate. Though some markets have seen substantial inventory gains on an annual basis, all 20 markets have significantly fewer homes for sale than pre-pandemic. On average, for-sale inventory was 58.1% lower than pre-pandemic in the top-ranked markets, while inventory was roughly 40% lower nationally.

Limited inventory drove competition higher, which put upward pressure on prices across the country. In-demand, affordable markets, such as those on the Wall Street Journal/Realtor.com Housing Market Ranking list, have seen prices climb especially high relative to pre-pandemic prices. On average, home prices in the top 20 markets were 58.8% higher than pre-pandemic (2019) in March.

High demand for these affordable locales meant that homes did not spend very long on the market. In March, homes spent an average 50 days on the market at the national level. The top 20 markets saw homes spend roughly two weeks less time on the market than the typical U.S. home as the pace of sale remained quick despite climbing prices. Homes in the top-ranked markets also sold faster than pre-pandemic, spending roughly a month less time on market in March 2024 compared to March 2019.

Strong Mid-sized Economies Support Growth

This year’s winners appeal to buyers due not only to their price levels, but also their access to amenities, short commute times, manageable metro sizes and favorable job markets.

The 200 largest US metros have an average unemployment rate of 4.0%. However, the best-ranked 20 markets boast stronger-than-average labor markets, with an average unemployment rate of 3.4%. These markets also out-perform the national labor market, which saw an unemployment rate of 3.8%. The national housing market added an impressive 303,000 more jobs in March, remaining strong despite the Feds’ efforts to cool the economy sufficiently enough to rein in inflation. All but 2 of the top-ranked markets had an equal or lower unemployment rate than the national rate, including Manchester-Nashua, N.H. (2.4%) and Portland-South Portland, Maine (2.7%), areas that saw the best employment conditions.

Though the best-ranked 20 markets saw wages 4.5% lower than the 200 metro average, in exchange, residents in these areas saw shorter commute times and a lower cost of living than the large metro average. Commutes were 5.3% lower, on average, in the top markets compared to the 200 largest markets. Appleton, WI and Fort Wayne, IN boast the snappiest commutes, with residents spending just 20 and 21 minutes on average, respectively, commuting to work.

Twelve of the top 20 markets out-perform the top 200 metros in terms of amenities, which are defined as the number of ‘everyday-splurge’ establishments (for example, specialty grocery stores and coffee shops). Buyers in these mid-sized markets can enjoy the upside of abundant options commonly found in larger areas, without sacrificing a smaller-town feel. Half of the top 20 markets have a population lower than 500,000 people. Furthermore, these best-ranked metros are 52.1% smaller, on average, than the largest 200 U.S. metro average.

Top Markets Bring In Viewers from Out-of-Market

Out of metro viewership picked up in the first quarter, growing an average 1.3 percentage points year-over-year to 71.8% of all incoming viewership in the top 20 metros. The 200 largest markets saw just 70.7% of viewership from out-of-market shoppers, 1.1 percentage points lower than the top 20 metros.

All but three of the foremost 20 markets saw out-of-metro viewership increase annually in the first quarter. Springfield, MA saw the largest increase, with out-of-metro views increasing from 67.0% to 73.0% between Q1 2023 and Q1 2024. Kingsport-Bristol-Bristol, Tenn.-Va. saw the largest share of out-of-metro viewers (80.6%) in the first quarter of 2024, attracting the highest share of viewers from New York City, Johnson City, TN and Atlanta, GA. On the other end of the spectrum is Columbus, OH, which had the highest share of in-metro viewers (45.2%) among the 20 best-ranked markets in the first quarter.

City Spotlight: Rockford, IL

This month’s highest-ranked market is Rockford, IL. Located roughly 90 miles from both Milwaukee and Chicago, and roughly 75 miles from Madison, Rockford puts buyers within occasional commuting distance of multiple metro hubs. Home shoppers in this area can access the amenities of nearby big cities while taking advantage of the area’s low home prices.

The median listing price in Rockford was $235,000 in March, 51.7% higher than one year prior, but still nearly $200,000 lower than the 200-metro average median. Though home prices have climbed significantly, this is in part due to an increase in for-sale home size. The median listing price per square foot, which controls for home size, climbed 13.5% annually in March. Homes spent 37 days on the market in Rockford in March, roughly 2 weeks less than the national median, and 9 days fewer than one year prior.

Demand, as measured by views per property, was 90% higher in March 2024 compared to the pre-pandemic average in the area. As a result, the median listing price in Rockford was 71.8% higher in March 2024 than 5 years prior, and inventory was 72.3% lower than the March 2017-2019 average.

Almost three-quarters (72.7%) of views to properties in Rockford came from outside of the metro in the first quarter, with particularly sizable out-of-metro attention from the Chicago (56.2%) area. This share increased by 2.3 percentage points in Q1 of 2024 compared to the previous year, indicating a pick up in demand from non-locals.

Rockford, IL Housing Highlights

Home Shoppers From Chicago Drive Rockford Demand

The revamped Wall Street Journal/Realtor.com Housing Market Ranking utilizes new metrics, such as climate risk data, and a reconfigured weighting system. To account for these changes, we ran the numbers from one year ago with the updated methodology to understand how the market is shifting.

Returning Markets

There are familiar places on the list of the top 20 markets: 13 members of this spring’s list would have been on the list one year ago. Among the markets that have remained on our list is the ever-popular Southern locale of Kingsport-Bristol, Tenn., as well as the Midwestern hotspot of Columbus, Ohio, and various small- to mid-sized Midwestern cities that offer affordable housing and low cost of living. Notably, the popular and fast-moving Northeastern metro of Manchester-Nashua, N.H. also remained on the list, continuing the reign of Boston-adjacent locales.

Markets Falling Out of the Top 20

Seven markets fell off of the list between the last year and this year, but all remained within the top 60 markets. The biggest mover was last year’s 15th-ranked market, Evansville, Ind.-Ky., which fell 41 spots to rank 56th this spring. Relatively high-price Boulder, CO also fell off the list this spring as no West region markets ranked in the top 20.

New Markets

Taking the places of the 7 descended markets are five affordable Midwestern locales, and two relatively affordable Northeast metros. All of the markets ascended from within the top 40. Much like the markets that stayed in the top 20, most of the Midwest new markets, as well as one of the two Northeast new markets were more affordable than the national market. Ann Arbor, Mich, and Burlington-South Burlington, Vt. were all higher priced than the national median in March.

Methodology

The ranking evaluates the 200 most populous core-based statistical areas, as measured by the U.S. Census Bureau, and defined by March 2020 delineation standards for eight indicators across two broad categories: real estate market (60%) and economic health and quality of life (40%). Each market is ranked on a scale of 0 to 100 according to the category indicators, and the overall index is based on the weighted sum of these rankings. The real estate market category indicators are: real estate demand (15%), based on average pageviews per property; real estate supply (15%), based on median days on market for real estate listings, median listing price trend (10%), based on annual price growth over the quarter, property taxes (10%) and climate risk to properties (10%). The economic and quality of life category indicators are: unemployment (5%); wages (5%); regional price parities (5%); the share of foreign born (5%); small businesses (5%); amenities (10%), measured as the average number of stores per specific “everyday splurge” category (coffee, upscale/specialty grocery, home improvement, fitness) per capita in an area; and commute time (5%).