Realtor.com recently identified several hot housing markets in the Western United States, such as the Las Vegas-Henderson-Paradise area in Nevada, Phoenix-Mesa-Scottsdale in Arizona, St. Louis in Missouri, Riverside-San Bernardino-Ontario in California, and Los Angeles-Long Beach-Anaheim, based on the number of views listings in these areas attract and how long they stay active on the website. Large metros are heating up as homebuyers return to the office, with these areas receiving about 11 percent more views per listing than the U.S. median and homes spending 15 fewer days on the market. The top spot continues to be the Manchester-Nashua market in New Hampshire, followed by Rochester, New York, Worcester in Massachusetts-Connecticut, Springfield in Massachusetts, and Columbus, Ohio.
The housing market is facing challenges from high mortgage rates and elevated prices, making home buying the most expensive it has been in years. As of March 28, the 30-year fixed mortgage rate is averaging nearly 6.8 percent, higher than a year ago. While prices nationally only went up by 0.3 percent in February year-over-year, the most popular markets saw a nearly 4 percent jump. However, prices in these markets are starting to ease. Jones noted that the average hot market price growth in February was the lowest since August 2021, suggesting that easing price growth is affecting even the most in-demand markets. Additionally, the typical home for sale in hot markets was slightly smaller compared to a year ago.
One reason for the easing of prices in popular markets is the changing nature of properties entering the market. Jones pointed out that the median listing price per square foot increased by 5.5 percent annually in February. Meanwhile, southern metros have seen a decline in popularity, with eight of the top 10 cooling markets located in the South. Sun Belt metros initially saw increased demand during the COVID-19 pandemic but faced challenges from rising prices and mortgage rates. In contrast, more affordable markets in the Midwest and Northeast have grown in popularity as southern markets cool off.
The ongoing changes in the housing market signal a shift in buyer preferences and market dynamics. As the nature of work returns to pre-COVID patterns, buyers are seeking homes near business hubs, driving up demand in large metros. Despite challenges from high mortgage rates and elevated prices, the housing market remains active, with hot markets seeing increased interest and faster sales. The evolving real estate landscape highlights the importance of staying informed about market trends and adapting strategies to meet changing consumer demands.
Overall, the real estate market in the Western United States is experiencing a surge in popularity, with cities like Las Vegas, Phoenix, and Los Angeles seeing significant improvements in housing market activity. While challenges such as high mortgage rates and rising prices persist, the market continues to attract buyers looking for homes near key business hubs. As southern markets cool off, more affordable options in the Midwest and Northeast are becoming increasingly popular, pointing to a shift in buyer preferences and market dynamics. Staying informed about these trends is essential for both buyers and sellers navigating the complex and evolving real estate landscape.
