US home sales remained low in 2024 due to high mortgage rates and home prices. Demand was high in Southeastern cities like Charlotte and Knoxville despite affordability issues. Analysts predict that home sales could increase in 2025 due to lower mortgage rates.
It’s been another tough year for the U.S. housing market, but it’s been anything but boring for people in popular cities.
The National Association of Realtors recently noted that home sales have been weak for the third year in a row. Although mortgage rates and home prices have fallen from their peak levels, affordability remains a major issue, with millions of prospective buyers abandoning their purchases and renting instead.
National Association of Realtors
But sellers in hot markets still scored big wins as buyers competed for rare spots in coveted cities.
10 places where movers will flock in 2024
To determine this year’s hottest U.S. real estate markets, Business Insider looked at six sources of information on mobility patterns, rents, rental market competitiveness, homebuyer search interests, and home price growth history and forecasts. collected and analyzed data.
Although there were some mixed signals, there were also some clear conclusions about which regions, states, and cities are generating the most interest from buyers and renters.
A quick look at Atlas Van Lines’ migration data may leave you with more questions than answers. The moving company found that the places with the most people coming in compared to leaving are Arkansas, Rhode Island, North Carolina, Idaho, and Washington, DC. The list of states with inbound rates of at least 55% also includes Maine, Connecticut, Washington, Alaska, Alabama, and New Mexico, covering virtually all four corners of the United States.
atlas van line
But while that movement data provides a solid picture, it doesn’t provide insight into which individual markets were the most popular. It was instead determined by other measures of demand, such as how much the prices of houses and apartments rose or how difficult those properties were to obtain.
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The process was more art than science, but the 10 cities in the state that best matched the conditions for a significant increase in the influx of movers were all east of the Mississippi River. What’s even more notable is that eight of the 10 most popular markets were in the Southeast, spanning three states: North Carolina, Kentucky, and Tennessee.
Thanks in part to four particularly popular markets, North Carolina tied for second in the nation with a 63% visit rate for moving companies. Winston-Salem and neighboring Greensboro have seen significant increases in their rental market competitiveness scores this year, with rents increasing 6.7% and 5.3%, respectively. The Tar Heel State’s other two largest cities, Charlotte and Durham, are among the top 20 most searched markets by homebuyers despite declining rents.
According to Realtor.com, these four North Carolina cities are on track to see high-single-digit or low-double-digit home price growth next year, with NAR highlighting Charlotte as the top spot for 2025 .
Charlotte is becoming one of the most popular cities among homebuyers. Photo by Mike Kline (notkalvin)/Getty Images
Neighboring Tennessee also boasted the highest inbound rate in the nation at 62%. Knoxville is one of the more competitive small markets, ranking 10th in the nation for homebuyer searches, despite only having a 1.5% rent increase. It is also on NAR’s list of hot markets for next year. Meanwhile, rents in Memphis increased by 22.7%, matching home price growth of 10.5%.
Kentucky’s inbound rate was more modest at 56%. However, among them are Lexington, which has a high rental market competitiveness score with a rent growth rate of 9.9% and ranked 8th in buyer searches, and Rent Cafe, which is ranked as the top rental market trend in 2024. Louisville also said it had.
Louisville became even more popular among renters in 2024. 4k clip/shutterstock
Jonathan Miller, co-founder of real estate firm Miller Samuel, said the southeastern market is popular because of its relatively warm weather and strong housing inventory.
“It’s a combination of weather and housing affordability,” Miller said in a recent interview.
The country’s capital, which represents the region bordering the Mid-Atlantic, has a 63% visitation rate among movers and ranks fifth in search rankings among homebuyers, driving prices up by 10.2%. Washington, D.C., was also one of the 30 most competitive rental markets, although supply held back price increases.
Rounding out the list was New Haven, Connecticut, perhaps the hottest market. The region is the fourth most competitive rental market this year, with December rent growth of 35.7%, by far the highest in the United States. Additionally, home prices rose 18.3% in November and are expected to rise another 9.7% next year due to its connection to Yale University and proximity to New York City.
New Haven’s December year-over-year rent growth was the fastest in the nation. John Bilous/Shutterstock
What to expect in 2025
The U.S. housing market is slowly thawing after being frozen by soaring mortgage rates. While some real estate analysts predict further sales growth in 2025, others are more skeptical.
Optimists are calling for the biggest rally since the pandemic boom. The National Association of Realtors expects home sales to increase by 7% to 12% in 2025, including an 11% increase in new construction, but eXp Realty’s CEO expects lower mortgage rates and increased supply to increase sales by 10%. % growth.
But Realtor.com’s sales forecast is more subdued at 1.5%, as is Miller’s call for a 3% increase. The veteran real estate analyst said mortgage rates are likely to remain above 6%, weighing on demand. Additionally, supply is limited. Still, he expects home prices to rise by 4% to 5%.
“If mortgage rates unexpectedly fall below 6%, there could be a housing boom,” Miller said. “While that doesn’t seem likely to happen, there is significant upside potential for volumes despite rising mortgage rates.”
Despite recent interest rate cuts, 30-year fixed-rate mortgages remain above 6%. freddie mac
Against this backdrop, Miller said buyers will continue to seek out affordable markets that correlate with strong inventory. That’s why the sunbelt region was so hot in 2024.
Miller says this year’s most popular markets will likely be among next year’s winners. He didn’t predict the next boomtown, but said the population surge to Texas and Florida has run its course. These states were battlegrounds in the early 2020s, but the trend in each state has leveled off this year.
“It’s not that those markets aren’t attractive,” Miller said. “The momentum of international migration is slowing as millions of new residents settle down. Growth rates are no longer soaring.”
However, the exodus from large states with densely populated cities appears to be far from over, with three of the five states with the highest numbers of people moving abroad being California, Illinois, and New York. Taxes in each of these states are relatively high, and Miller has a hunch that some movers may try to move ahead in anticipation of state and local tax credits expiring at the end of 2025. .
