Primarily fueled by consumer demand, home prices have surged since the onset of the COVID-19 pandemic. According to government data, the median sale price for a new, single-family home in the U.S. surged from $310,100 in April 2020 to $406,000 in July 2021, and has consistently remained above $400,000 thereafter. Concurrently, amidst a succession of rate hikes by the Federal Reserve, the average interest rate on a 30-year fixed-rate mortgage has exceeded 6% since September 2022, marking a level not observed in nearly fifteen years.
According to 24/7 Wall St., soaring prices and historically high interest rates has made homeownership prohibitively expensive for a growing number of Americans. Partially as a result, the housing market has cooled considerably. After multiple months of precipitous decline between October 2020 and December 2023, new single-family home sales fell from over 1 million to fewer than 665,000. In the last 11 months alone, existing home sales have fallen by 17%.
According to the real estate market data website, realtor.com, homes are now sitting on the market for months at a time in cities across the United States. Still, in some parts of the country, demand for housing remains relatively high, and most homes find buyers within a matter of weeks.
Using data from Realtor.com, 24/7 Wall St. identified America’s 30 hottest housing markets. Metro areas are ranked by their Market Hotness Index score, a proprietary measure from Realtor.com that takes into account how long homes are on the market, as well as several measures of supply and demand dynamics. All data is for December 2023. When two metro areas have the same index score, the city where the median list price has climbed more in the last year ranks higher.
