South and West struggle as Northeast dominates hottest housing markets

Damian Eales Chief Executive Officer | realtors.com

Mortgage rates have decreased significantly from last October's peak, but the South and West regions of the United States remain absent from Realtor.com®'s Hottest Housing Markets list. Manchester, New Hampshire, has dominated the rankings, holding the top spot for the 30th time in seven years and for nine consecutive months.

Hannah Jones, a senior economic research analyst at Realtor.com®, explains that the South is experiencing an increase in housing stock while buyer demand has waned. "More homes mean fewer viewers per home and more time on market," she states. This results in a lower ranking on the hotness scale.

In contrast, high home prices are impacting the West's presence on these lists. "As mortgage rates remain relatively high, many West-region buyers cannot contend with the area's prices," says Jones. This leads to more inventory and a slower market pace.

The Northeast and Midwest currently lead with ten markets each on the list. Jones notes that since mid-2022, these regions have been home to most of America's hottest markets as mortgage rates increased.

Manchester's appeal lies in its proximity to Boston, affordable median home price of $563,000—$277,000 less than Boston—and lack of state income and sales taxes. Homes in Manchester received 3.4 times more views than the national average in September and sold within about 25 days.

Three cities tied for second place: Concord, NH; Rockford, IL; and Springfield, MA. Each city had distinct factors contributing to their ranking: Concord had high viewership; Rockford offered affordable homes at $223,000; Springfield had homes selling quickly at 28 days on average.

Four states—New Hampshire, Massachusetts, Wisconsin, and Connecticut—each had two metros among the top 20 markets. Home prices rose in 15 of these hottest markets despite a national decline of 1% year over year in September.

Jones attributes this rise to "high demand and scarce for-sale inventory." Rochester saw a significant annual price increase of 13%, while Milwaukee was up by 11.4%.

Homes in these popular markets sell rapidly due to intense demand—properties spent just 34 days on average on the market compared to national averages—and listings received views 2.6 times higher than elsewhere.

Jones suggests that improving housing affordability due to falling mortgage rates might change buyer demand dynamics across different markets nationwide.