Unveiling the Top Hottest Housing Markets

As the housing market experiences a resurgence in demand, thanks to lower mortgage rates, declining inflation, and reduced recession risk, it's an excellent time to take a closer look at which markets are currently sizzling across the United States. While the term "hottest" no longer necessarily translates to frantic buyers paying exorbitant amounts over asking prices and waiving inspections, it does mean returning to the fundamentals of healthy demand, ample supply, and attractive financing options.


Mar 4 | 7 minutes read
USA housing market

In this article, we'll dive into the hottest housing markets across the country, exploring what sets them apart and why they're experiencing such a surge in popularity. Whether you're a first-time buyer looking for an affordable starter home or a seasoned investor seeking to capitalize on a booming market, we've got you covered. So, let's get started and discover which regions are currently leading the way in the U.S. housing market!

 

Top 6 Hottest Housing Markets in 2023: Where to Buy and Why

Are you on the hunt for the perfect housing market to buy your next home? Look no further than the top 6 hottest housing markets in 2023, as ranked by the Housing Market Index. These markets are not only thriving despite the COVID-19 pandemic, but have also managed to maintain their popularity even as workers return to offices and lending rates trend upwards.

 

So where should you be looking? The top spot goes to Raleigh, with an impressive Housing Market Index total of 71.7, followed by Denver at 67.5. In a tie for third place are Austin and Durham, both with scores of 67.3. Phoenix comes in at number five with a score of 66.9, followed closely by Richmond at 66.8.

 

What sets these markets apart? Besides being popular due to the record-low mortgage rates and the desire for more living space during the pandemic, each MSA offers the appeal of big-city amenities without the drawbacks of larger cities like New York, Los Angeles, or Chicago. These markets are also seeing huge amounts of interest from buyers, meaning that now is the time to act if you're looking to buy in one of these areas.

 

Keep in mind that the Housing Market Index is updated regularly, so be sure to check back often to see how these markets are performing. Whether you're a first-time homebuyer or looking to upgrade to your dream home, these top 6 hottest housing markets in 2023 are definitely worth considering.

 

Raleigh: The Hottest MSA for Housing in 2023

Looking for the ultimate hot spot for housing in 2023? Look no further than the Raleigh metropolitan statistical area (MSA), which boasts an impressive mix of strengths that make it an ideal place to invest in real estate. With a relatively affordable monthly mortgage payment to income ratio, low unemployment, and a healthy ratio of building permits to employment growth, it's no wonder that Raleigh tops the list of hottest housing markets.

 

However, despite its strengths, Raleigh is not without its challenges. Low builder sentiment, anemic housing supply, and a reduced level of building permits to household growth mean that there will continue to be upward pressure on prices until more housing inventory is released to the marketplace.

 

So what are the various data points regularly tracked by the Housing Market Index for this MSA? Take a closer look:

  • Monthly mortgage payment to income ratio: This ratio measures the percentage of a homeowner's income that goes toward their monthly mortgage payment. Raleigh's relatively affordable ratio makes it an attractive destination for buyers.
  • Unemployment: A low unemployment rate is a key indicator of a strong local economy, which can have a positive impact on the housing market. Raleigh's low unemployment rate is a definite plus.
  • Ratio of building permits to employment growth: This ratio measures the number of building permits issued compared to the rate of employment growth in the area. A healthy ratio indicates that there is demand for new housing in the market, which can help to keep prices stable.

In summary, Raleigh's mix of strengths make it the hottest MSA for housing in 2023. However, buyers should be aware of the challenges facing the market and be prepared to act quickly if they find a property that meets their needs. Keep an eye on the Housing Market Index for regular updates on this exciting market.

 

Raleigh MSA Housing Market: Leading the Way Despite Challenges

Despite being a top contender in the country's housing market, the overall Housing Market Index (HMI) for Raleigh MSA fell by 4.5% year-over-year through December. However, the region still maintains its lead position in the market, with an impressive HMI of 71.7. This HMI is calculated on a scale of 1-100 and is based on a variety of factors that provide insight into the health and performance of the market.

 

The HMI is further broken down into three sub-indexes, which provide a more detailed view of the housing market in the Raleigh MSA. These sub-indexes are demand, supply, and financial, and are also calculated on the same scale of 1-100. Here's a closer look at the HMI for each sub-index:

Demand HMI: With an impressive HMI of 73.9, demand for housing in the Raleigh MSA remains strong. This can be attributed to a variety of factors, including the region's growing economy and favorable living conditions.

Supply HMI: The supply of housing in the Raleigh MSA has been a challenge for the market, with an HMI of 48.7. This indicates that there is a shortage of available housing inventory, which has led to upward pressure on prices.

Financial HMI: The financial HMI for the Raleigh MSA is a standout, with an impressive HMI of 92.6. This indicates that the region has a strong financial foundation, which can have a positive impact on the housing market.

 

Overall, the Raleigh MSA's housing market continues to lead the way, despite facing some challenges. Buyers should be prepared for limited housing inventory and upward pressure on prices, but the region's strong economy and favorable living conditions make it an attractive destination for those looking to invest in real estate. Keep an eye on the HMI for regular updates on this exciting market.

 

Revitalized Job Market Fuels Raleigh's Economy

Raleigh's economy is on an upward trajectory, with a strong job market leading the way. The region has experienced impressive growth, gaining 35,600 jobs year-over-year through December 2022 at a rate of just over 5%. The low unemployment rate of 3.2% is a testament to the region's thriving job market.

 

According to data from the Bureau of Labor Statistics, the leisure and hospitality, financial activities, and professional and business services sectors have been the driving force behind Raleigh's recent job growth. These industries offer diverse employment opportunities, attracting professionals from across the country.

 

As the job market continues to flourish, Raleigh's economy is expected to thrive. With new businesses and talented professionals flocking to the region, the demand for housing is also on the rise. Investors and homebuyers are seizing the opportunity to capitalize on Raleigh's success, fueling a thriving housing market.

 

Raleigh's strong job market has positioned the region as a leader in the country, with a promising future ahead. As the region continues to grow, the economy is set to benefit from the region's dynamic job market and a diverse range of employment opportunities.

 

Raleigh's housing market continues to thrive, with a year-over-year increase in median home prices by 8.3% to $428,000, exceeding the national median home price of $388,000. However, the supply of homes for sale in Raleigh is low, with only 2.2 months of inventory. Until more supply is released, it's unlikely that home prices will fall significantly. Nonetheless, with a strong economy and job growth, the Raleigh housing market presents a solid investment opportunity for investors and homebuyers.

 

The rental market in Raleigh is showing signs of strength, with a year-over-year increase in median rent by 5.4% to $1,744, which is still below the national median of $1,981. The vacancy rate of 6.0% has declined over the past year but is slightly higher than the national rate of 5.8%. However, the current vacancy rate is still above the equilibrium point of 5.0%, which may limit short-term rent increases. Nonetheless, Raleigh's growing economy and job market are likely to continue to attract renters, making it an attractive investment opportunity for landlords and investors.

 

The Raleigh MSA's current mortgage delinquency rate of 2.8% is in line with the national average, but there is a possibility of an increase in the event of an economic downturn. However, the foreclosure rate remains low at 0.3%, which is on par with the national level.

 

Moreover, the U.S. News Housing Media Analysis tool is an excellent resource for anyone looking to keep track of the latest housing news. With over 500 housing news articles analyzed each month, users can filter the results to their specific region, source, keyword or time period. For January, the most popular keywords for the Raleigh MSA included "North Carolina," "Raleigh," "Wake County" and "Durham," indicating continued interest in the area. Additionally, keywords such as "apartment," "price" and "real estate pricing" suggest that people are looking to buy or rent new homes in Raleigh.


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