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Real Estate: 10 Housing Markets Buyers Are Flocking to as Rates Drop

October 3, 2024

3 min Read

Written by Yaël Bizouati-Kennedy

Edited by Gary Dudak

Checubus / Shutterstock.com

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After years of exploding rates, constantly fluctuating mortgage rates, low inventory and high home prices, there seems to be some hope on the horizon finally for homebuyers. Some specific housing markets are becoming even more attractive for buyers.

The 30-year mortgage rate dropped to 6.47% as of August 8 — its lowest rate in more than a year, according to Freddie Mac. While this is still a far cry from the 2% and 3% days of a few years ago, it’s enough breathing room for some buyers to get back in the game.

Realtor.com senior economist Jiayi Xu said that the expectation of lower mortgage rates is encouraging news for homebuyers who have been hindered by high rates as it will help to lower borrowing costs. In addition, Xu noted that with declining mortgage rates, the impact of the lock-in effect will start to ease and bring more sellers back to the market.

“On one hand, rising inventory will bring more fresh options for homebuyers to choose from,” said Xu, adding that this will also gradually exert downward pressure on price growth, which could provide more relief to homebuyers, especially to those first-time home buyers who do not have substantial equity to leverage.

Interestingly, among the 10 most popular markets in the country, “five are from the South, three are from the Northeast, two are from the Midwest, and none is from the West,” according to the report.

At the top of the list, is Columbus, Ohio, which “consistently ranks high among the Realtor.com hottest housing markets and top emerging housing markets, driven by its affordability, making it particularly attractive to families and young professionals,” according to the report.

Bluebird Companies CEO Michael Gevurtz said he has observed an increase in loan applications in Ohio as the coasts become too expensive.

“Many clients, though not residing there, are keen to invest in Ohio, particularly near Columbus, due to the area’s affordability and solid rental returns,” he said, adding that this trend is also emerging in other states, including Wisconsin, Illinois, Michigan and Indiana.

According to Xu, the greater interest of these top five cities is evidenced by a high share of online traffic, high view counts per property and nationwide interest. “Specifically, none of these top five markets are traditional big cities such as New York and Chicago but interestingly, these top five cities are not far from big ones.”

Further, many are midsize markets with relatively high affordability.

“While people move for different reasons, housing affordability is a key consideration for today’s home buyers when choosing where to live,” added Xu.