Realtor.com has released its 2023 Top Housing Markets forecast, highlighting markets that will see strong growth in home sales and listing prices following a period of relatively calm price increases and a smaller affordability crunch than other markets across the U.S.
The Hartford-West Hartford, Conn., market is expected to be the nation’s top market in 2023, followed by El Paso, Texas; Louisville, Ky.; Worcester, Mass.; and Buffalo-Cheektowaga N.Y.
Markets in Augusta-Richmond County, Ga.; Grand Rapids-Wyoming, Mich.; Columbia, S.C.; Chattanooga, Tenn.; and Toledo, Ohio, round out the top 10.
Home sales across these top 10 markets are forecasted to grow by 5.2%, whereas the national homes sale projection is for declining sales (-14.1%). Additionally, average home prices in the top 10 are expected to increase 7.3%, compared to 5.4% for the U.S. as a whole.
In the top 10 markets, about 23% of housing inventory is affordable at the median income level, compared to just 17% of affordable homes nationally. Better affordability offers some insulation from the impact of rising mortgage rates.
“As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand,” says Realtor.com Chief Economist Danielle Hale. “We’ve seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets, providing opportunities for all home buyers to stretch their homebuying dollars. Many of these areas flew under the radar in the pandemic frenzy and are now well-positioned to bubble up with solid job prospects without the big-city price tag.”
This year’s top 10 housing markets didn’t get as caught up in the wild buying frenzy – and price increases – of 2022 as other areas. Sale prices in the 12 months ending August 2022 increased by 10.5% on a year-over-year basis, compared to a growth rate of 12.6% for all 100 largest metros. The top markets have also seen less of a dip in sales in recent months, with sales declining by 9.1% year-over-year, compared to an average decline of 12.3% for all 100 metro areas.
Almost half of the buyers looking at the top 10 markets are from areas outside those states, Realtor.com says. For example, in Hartford, with a median price of $375,000 in October 2022, homebuyers from New York, Boston and Washington, D.C., were leading the wave of out-of-state views in the third quarter of 2022, finding a significant value proposition compared not only to the high price of houses in New York City ($670,000), but also the national median ($425,000).
Home sales in the top 10 metros also tend to leverage more government-backed mortgage products such as VA loans and FHA loans. Between January and August 2022, the share of mortgaged-sales with a VA loan was 9.4% in the top 10 markets vs. 7.5% among all the 100 markets reviewed. These types of loans help buyers safely enter the market with lower down payments and often slightly lower mortgage rates.
Connecticut Market Leads Realtor.com List of Top Spots for 2023
Realtor.com has released its 2023 Top Housing Markets forecast, highlighting markets that will see strong growth in home sales and listing prices following a period of relatively calm price increases and a smaller affordability crunch than other markets across the U.S.
The Hartford-West Hartford, Conn., market is expected to be the nation’s top market in 2023, followed by El Paso, Texas; Louisville, Ky.; Worcester, Mass.; and Buffalo-Cheektowaga N.Y.
Markets in Augusta-Richmond County, Ga.; Grand Rapids-Wyoming, Mich.; Columbia, S.C.; Chattanooga, Tenn.; and Toledo, Ohio, round out the top 10.
Home sales across these top 10 markets are forecasted to grow by 5.2%, whereas the national homes sale projection is for declining sales (-14.1%). Additionally, average home prices in the top 10 are expected to increase 7.3%, compared to 5.4% for the U.S. as a whole.
In the top 10 markets, about 23% of housing inventory is affordable at the median income level, compared to just 17% of affordable homes nationally. Better affordability offers some insulation from the impact of rising mortgage rates.
“As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand,” says Realtor.com Chief Economist Danielle Hale. “We’ve seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets, providing opportunities for all home buyers to stretch their homebuying dollars. Many of these areas flew under the radar in the pandemic frenzy and are now well-positioned to bubble up with solid job prospects without the big-city price tag.”
This year’s top 10 housing markets didn’t get as caught up in the wild buying frenzy – and price increases – of 2022 as other areas. Sale prices in the 12 months ending August 2022 increased by 10.5% on a year-over-year basis, compared to a growth rate of 12.6% for all 100 largest metros. The top markets have also seen less of a dip in sales in recent months, with sales declining by 9.1% year-over-year, compared to an average decline of 12.3% for all 100 metro areas.
Almost half of the buyers looking at the top 10 markets are from areas outside those states, Realtor.com says. For example, in Hartford, with a median price of $375,000 in October 2022, homebuyers from New York, Boston and Washington, D.C., were leading the wave of out-of-state views in the third quarter of 2022, finding a significant value proposition compared not only to the high price of houses in New York City ($670,000), but also the national median ($425,000).
Home sales in the top 10 metros also tend to leverage more government-backed mortgage products such as VA loans and FHA loans. Between January and August 2022, the share of mortgaged-sales with a VA loan was 9.4% in the top 10 markets vs. 7.5% among all the 100 markets reviewed. These types of loans help buyers safely enter the market with lower down payments and often slightly lower mortgage rates.
