Dozens of markets across the country are poised to see a significant surge of potential homebuyers in 2023.
Realtor.com has released its 2023 housing forecast and economic overview, detailing the metro areas expected to make growth — both in home sales and prices — during what’s expected to be a challenging time for the housing market.
Coming out on top in Realtor.com’s report is Connecticut’s Hartford-West Hartford-East Hartford metro area, which is expected to see sales growth to jump by 6.5% and produce a price growth increase of 8.5%. With 15% in total combined growth, the Hartford metro area is projected to edge out Texas’ El Paso metro area and Kentucky’s Louisville metro area, which ranked second and third, respectively, in the 2023 housing forecast.
A ranking of the top 10 housing markets of 2023, as determined by Realtor.com, can be found below. (Metropolitan statistical areas, or MSAs, are defined by the U.S. Census Bureau.)
- Hartford-West Hartford-East Hartford, Connecticut (Combined growth of 15%)
- El Paso, Texas (14.3%)
- Louisville/Jefferson County, Kentucky/Indiana (13.6%)
- Worcester, Massachusetts-Connecticut (13.1%)
- Buffalo-Cheektowaga-Niagara Falls, New York (12.3%)
- Augusta-Richmond County, Georgia/South Carolina (11.9%)
- Grand Rapids-Kentwood, Michigan (11.6%)
- Columbia, S.C. (11.3%)
- Chattanooga, Tennessee-Georgia (11.1%)
- Toledo, Ohio (10.9%)
For comparison, the average combined growth for the entire U.S., as projected by Realtor.com, is -8.7% (-14.1% sales growth, 5.4% price growth).
Why is there such a large suspected increase of interest in these particular metros? Realtor.com noted that this is likely due to the early stages of the COVID-19 pandemic, which saw mortgage rates drop to record lows. However, in 2022, the Fed increased the policy interest rate, making borrowing more expensive. The low prices skyrocketed in a 10-month surge from 3.1% to almost 7.1%.
Many homebuyers then went on the hunt for affordable metros, straying further from large, urban centers to mid-size cities with strong economies.
The cities in the top 10 on Realtor.com’s housing report appear to fit this description, offering a larger share of affordable homes for a median income.
Those looking for a new home aren’t set on staying where they are, either. The study found that over 60% of homebuyers browsing Realtor.com are looking at properties away from their current cities — an increase from the less-than-50% of site users who were looking to move away from their residencies pre-pandemic.
These smaller markets also attract retirees looking for a lower cost-of-living, young families seeking larger homes, and people simply looking for a higher quality of life.
“We expect cross-market activity to continue in 2023, as affordability will keep these top markets in the spotlight for homebuyers,” Realtor.com writes.
More information, as well as a ranking of the country’s 100 largest metros and where they stand in the report, can be found at Realtor.com.