Another difficult year in the American housing market has been even boring for citizens of working-class cities.
Home sales were soft for a third straight year, the National Association of Realtors recently noted. Mortgage rates and home prices are down from peak levels, but affordability remains a major issue and has sidelined millions of would-be buyers, who are instead renting.
But traders in hot markets still earned big as buyers fought for the few available spots in coveted cities.
To determine this year’s US housing markets, Business Insider compiled and analyzed data from six resources on changing trends, rents, rental market competitiveness, homebuyer search interests, as well as history and growth projections. of the value of the home.
While the signals are mixed, transparent conclusions have also been reached about which regions, states, and cities have generated the most interest from buyers and renters.
A brief review of Atlas Van Lines’ migration knowledge would likely raise more questions than answers. The moving company found that the places with the highest number of inbound moves compared to outbound ones were Arkansas, Rhode Island, North Carolina, Idaho, and Washington, D. C. Maine, Connecticut, Washington, Alaska, Alabama, and New Mexico, which necessarily cover all four corners of the United States, were also on the list of states with inbound traffic rates of at least 55%.
But while that moving data gives a solid big-picture overview, it doesn’t provide insight into which individual markets were most popular. That was instead determined by other measures of demand, like how much prices for homes and apartments rose, or how tough they were to land.
This procedure is more of an art than a science, yet the 10 most productive cities that met those criteria among states with a giant positive flow of immigrants were all east of the Mississippi River. What’s even more notable is that the Southeast is home to 8 of those ten popular markets, spread across just 3 states: North Carolina, Kentucky, and Tennessee.
North Carolina was tied for second in the nation in mover inbound rate at 63%, due in part to four especially hot markets. Winston-Salem and nearby Greensboro saw their rents rise 6.7% and 5.3% this year, respectively, giving their rental-market competitiveness scores a big boost. Two other major cities in the Tar Heel State — Charlotte and Durham — saw rents decline but were among the 20 most searched markets by homebuyers.
These four North Carolina cities are expected to see single-digit or double-digit home value expansion next year, according to Realtor. com, and the NAR highlighted Charlotte as one of the most sensible places in 2025.
Neighboring Tennessee also had one of the nation’s highest inbound rates, at 62%. Knoxville was one of the more competitive smaller markets despite rent growth of just 1.5%, and it ranked 10th in the nation in homebuyers’ searches. It’s also on the NAR’s list of standout markets next year. Meanwhile, Memphis saw 22.7% rent growth and is in line for 10.5% home price growth.
Kentucky’s arrival rate is 56% more modest. But there’s Lexington with 9. 9% hiring growth, a top competitiveness score in the hiring market position, and the eighth position in customer searches, as well as Louisville, which RentCafe deemed the hottest position in the hiring market in 2024.
Jonathan Miller, the cofounder of the real-estate firm Miller Samuel, says the Southeast market is popular because it’s relatively warm and has ample housing inventory.
“It’s a combination of the weather and housing affordability,” Miller said in a recent interview.
The nation’s capital represented the mid-Atlantic frontier with a 63% move-in arrival rate and fifth place in homebuyer searches, driving prices up 10. 2%. Washington, D. C. , was also one of the top 30 most competitive rental markets, and the source kept value expansion in check.
Rounding out the list, New Haven, Connecticut, was arguably the market. It is the fourth most competitive leasing market this year, and hiring expansion was by far the highest in the U. S. in December, with a 35. 7%. The country also recorded an 18. 3% expansion in November and is expected to see a further 9. 7% increase next year due to its ties and proximity to Yale University with New York City.
The US housing market has been slowly thawing after freezing due to emerging lending rates. Some real estate analysts expect sales to occur in 2025, while others are more skeptical.
Optimists are calling for the biggest jump since the rise of the pandemic. The National Association of Realtors projects home sales between 7% and 12% in 2025, adding an 11% increase for new units, while the CEO of eXp Realty calls for a 10% expansion caused by the decrease in loan rates and greater supply.
But Realtor. com’s sales forecast is more moderate, at 1. 5%, as is Miller’s forecast for a 3% increase. The veteran real estate analyst said lending rates will likely remain above 6%, weighing on demand; Furthermore, the source is also limited. However, he expects the cost of assets to be between four and five percent.
“If lending rates fall below 6%, we may have a housing boom,” Miller said. “It just doesn’t seem like it’s an option, but there are many prospects for higher transaction volumes, despite higher lending rates. “
Miller said that in this environment, buyers will continue to look for affordable markets, correlating with abundant inventory. This is why the Sunbelt region was so hot in 2024.
Miller says this year’s most popular markets will likely be among the winners next year. He didn’t expect the next boom city, but he said advances toward Texas and Florida had run their course. These states were very hot in the early 2020s, even though this year had fluctuating flows.
“It’s just that those markets are less attractive,” Miller said. Internal migration is less intense as millions of new citizens settle. The rate of expansion is no longer emerging in a pronounced way. “
However, it appears that the exodus from giant states with densely populated cities is not over, as three of the five states with the largest number of outgoing immigrants are California, Illinois and New York. Each of those states has high taxes, and Miller has a drop that some moving companies might try to preemptively overcome in anticipation of state and local tax deductions scheduled to expire at the end of 2025.
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