As the world inches closer to pre-pandemic norms, housing markets in several states are witnessing a significant surge in interest, according to real estate platform realtor.com. Analyzing data based on website views and listing activity, the platform identifies areas experiencing heightened popularity among homebuyers.
In a recent report, realtor.com highlights notable shifts in housing market dynamics, particularly in regions across the West. The Las Vegas-Henderson-Paradise area in Nevada soared 141 spots on the list of hottest markets, closely followed by Phoenix-Mesa-Scottsdale in Arizona, which climbed 76 positions. Additionally, St. Louis, Missouri, Riverside-San Bernardino-Ontario, California, and Los Angeles-Long Beach-Anaheim, California, witnessed notable increases in demand, with improvements ranging from 59 to 75 spots.
According to Hannah Jones, senior economic research analyst at realtor.com, the resurgence of interest in these metropolitan areas reflects a trend of homebuyers seeking proximity to business hubs as traditional work settings resume. "Large metros continue to heat up as homebuyers return to the office and look for a home near business hubs," Jones stated. "These areas pulled in about 11 percent more views per listing than was typical in the U.S. in February, and homes spent 15 fewer days on the market than the U.S. median."
Meanwhile, the Manchester-Nashua market in New Hampshire maintains its position as the top "hot" spot, followed by Rochester, New York, Worcester in the Massachusetts-Connecticut area, Springfield, Massachusetts, and Columbus, Ohio.
Despite the surge in interest, the housing market grapples with challenges such as high mortgage rates and elevated prices, marking the most expensive period for homebuyers in years. As of March 28, the 30-year fixed mortgage rate averages nearly 6.8 percent, significantly higher than the previous year's rate of 6.32 percent, as reported by Freddie Mac.
While nationally, prices witnessed a modest 0.3 percent increase in February compared to the previous year, popular markets experienced a substantial 4 percent jump, according to realtor.com. Nonetheless, Jones notes a slight easing in prices within these markets. "February's average hot market price growth was the lowest since August 2021, suggesting that easing price growth is affecting even the most in-demand markets," she explained.
Jones also highlighted changes in property characteristics entering the market, with a trend towards slightly smaller homes compared to the previous year. However, the median listing price per square foot saw a 5.5 percent annual increase in February, indicating continued demand despite evolving preferences.
Interestingly, while Southern metros witnessed a decline in popularity, markets in the Midwest and Northeast saw increased interest. Jones attributed this shift to rising prices and mortgage rates in the once-favored Southern markets, prompting buyers to explore more affordable options elsewhere.
As the housing landscape evolves amid shifting work trends and economic conditions, these trends offer valuable insights for prospective homebuyers and sellers alike, navigating a dynamic and competitive real estate market.