Where are people shopping for homes now that mortgage rates have fallen significantly from last October’s peak?
Not in the South.
Nor out West.
For the past year, these huge chunks of the country have been consistently left off the Realtor.com® rankings of the Hottest Housing Markets, pushed aside by places such as Manchester, NH (which just ranked No. 1 for the 30th time in seven years and the ninth month in a row).
So why aren’t homebuyers flocking to these sunnier, warmer climes?
In the case of the South, it comes down to supply and demand: This region of the country has seen housing stock boom over the past year as buyer demand waned.
“More homes means fewer viewers per home, and more time on market, which results in a very cool hotness reading,” explains Hannah Jones, Realtor.com senior economic research analyst.
And you can blame high home prices for the West’s absence from these rankings.
“As mortgage rates remain relatively high, many West-region buyers cannot contend with the area’s prices, which results in more inventory, a slower market pace, and a cooler hotness score,” Jones says.
Where America’s hottest real estate markets are located
With Manchester leading the way, the Northeast and the Midwest boast 10 markets each on the list.
“The Midwest and Northeast have reigned supreme as homes to most of the country’s hottest markets since mid-2022 when mortgage rates picked up steam,” says Jones.
Manchester touts a trifecta of features that make it attractive to homebuyers: This small Northeastern city is an hour from a large metro (Boston); it boasts a relatively affordable median home price of $563,000 ($277,000 lower than Beantown’s $840,000); and it’s in New Hampshire, which doesn’t have any state income and sales taxes.
“This Boston-adjacent metro has been red-hot since March 2021, ranking among the top three markets each month for more than three years,” Jones says in her analysis.
Manchester’s listings received 3.4 times more views in September than the national average, with homes getting snapped up by buyers in about 25 days after hitting the market.
(The national average for days on the market is double that, at 55 days.)
“Manchester’s hotness means that high demand is met with low inventory as buyers claim available homes,” says Jones.
“The area has not seen any significant shift in buyer attention, which means that inventory has not been able to recover.”
The 3 U.S. cities tied for second place
Three cities ranked No. 2 on our top 20 list: Concord, NH; Rockford, IL; and Springfield, MA.
Each of the cities had a different hotness factor going for it that made for a three-way tie.
Homes in Concord received the most views, 3.2 times more than the national average in September.
Rockford’s listings offered the most bargains, with the typical home costing $223,000.
And Springfield boasted the shortest time on the market, at 28 days.
Four states had two metros each in the top 20: New Hampshire, Massachusetts, Wisconsin, and Connecticut.
Prices climb in the top 20 markets
The hotter a market gets, the more home prices rise, with list prices climbing in 15 of the 20 hottest markets.
Indeed, though home prices fell 1% year over year nationally in September, prices grew an average of 3.6% in the hottest markets.
This was “due to high demand and scarce for-sale inventory,” says Jones.
Rochester experienced the largest annual price increase in September, up 13.0%, while Milwaukee was up 11.4%.
Homes in the hottest markets are disappearing
Those looking to scoop up a home in a hot market should act quickly.
In September, housing stock rose 34% year over year nationwide.
Yet in the hottest markets, growth was more modest, with listing levels up 23.8% on average.
Homes in these markets moved fast—spending just 34 days on the market.
That’s “three weeks less time on the market than is typical nationally,” says Jones.
Demand was also intense, with views per property 2.6 times higher than the national average in September.
“High demand and scarce inventory conditions drive views per property higher, upping the competition for homes in the hottest markets and leading to snappier home sales,” says Jones.
Yet with housing affordability finally starting to improve with falling mortgage rates, this “could start to shake up buyer demand,” says Jones—as well as which markets remain hot.
“Many less-hot markets across the country have seen a significant buildup in housing inventory, which can absorb an uptick in demand without much upward price pressure,” adds Jones.