The Hottest Housing Markets for 2024 Have Been Revealed by Zillow Experts: Which Cities Made the Top Ten?

According to Zillow's predictions, Buffalo, New York, will be the hottest housing market in the US this year.

Affordability is the strongest driver of real estate this year, the company said, pushing lower-priced markets to the top of the rankings.

The typical home in Buffalo costs $248,445, according to Zillow, well below the U.S. average of $347,415.

Cities in the Great Lakes, the Midwest and the South rounded out Zillow's top ten, which also took into account job growth, home value growth and how quickly homes are selling.

“Housing markets are healthiest where affordable home prices and strong employment give young hopefuls a real opportunity to buy and build equity,” said Anushna Prakash, data scientist for Zillow Economic Research.

“I am cautiously optimistic that the housing market will return to stable footing in 2024 – we should not see the huge price spikes of the early pandemic or the rapidly rising mortgage rates of recent years,” she added.

Buffalo has the highest number of new jobs per new home, according to Zillow.

Experts predict this means demand for housing in the city will increase by 2024, as new jobs often mean new residents moving to the area.

Second and third on the list of the hottest housing markets of 2024 are Cincinnati and Columbus, Ohio, where the average home costs $270,826 and $301,138, respectively.

Columbus is home to the fastest projected increase in the number of owner-occupied households, according to Zillow, which is an indication of population growth and the number of families settling in the city.

Inventory also moves extremely quickly in Columbus and Cincinnati – where properties typically spend only 11 days on the market – almost half the national average.

Rounding out the top ten hottest housing markets of the year are Indianapolis, Indiana, Providence, Rhode Island, Atlanta, Georgia, Charlotte, North Carolina, Cleveland, Ohio, Orlando, Florida and Tampa, Florida.

Zillow predicts that affordability should improve this year, but will still be the biggest driver of the housing market in 2024.

Competition for homes is already fierce in the Great Lakes and Midwest affordable markets, the report said, meaning home sellers tend to close with buyers much faster than the 21-day national average.

Housing costs reached record highs for both buyers and renters in 2023, effectively freezing the market for millions of Americans.

The real estate company revealed in a separate study how potential homebuyers in 2023 were generally moving to smaller cities in search of cheaper homes.

And wealthier homebuyers in some markets paid cash at record levels to avoid sky-high mortgage rates, which hit 8 percent in October.

But there are signs of improvement for the new year.

Mortgage rates have been falling since late October, with the typical 30-year fixed rate averaging 6.62 percent according to the latest Freddie Mac data as of Jan. 4.

Sam Khater, Freddie Mac's chief economist, said: “Given expectations of rate cuts this year from the Federal Reserve and easing inflationary pressures, we expect mortgage rates to continue to decline over the course of the year.”

According to the National Association of Realtors, lower mortgage interest rates boosted sales of existing homes late last year. In November, mortgage rates rose 0.8 percent, breaking a series of declines over the past five months.

But experts predict the shortage of homes for sale will continue this year, increasing competition.

“While lower mortgage rates are welcome news, potential homebuyers still face the dual challenge of low inventories and high home prices that continue to rise,” Khater added.