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February 02, 2023 at 03:05 PM
Related: 15 Best U.S. Cities to Invest in Real Estate: 2022
This is a winter of discontent for the U.S. housing market, according to a recent report from The Wall Street Journal/Realtor.com. Home sales are expected to continue to decline after falling by 34% in 2022. Even the most optimistic projections of forecasters and consumers expect home prices to fall.
Against this backdrop, there are hints of optimism. In contrast to the slowdown in home construction, the employment rate remains buoyant, which is driving nominal wage gains. In addition, homeowners continue to enjoy high levels of home equity.
Still, potential homebuyers face considerable financial hurdles. The typical 30-year fixed mortgage rate is some 250 basis points higher than a year ago. This and continuing home price gains have increased the cost of a monthly mortgage payment, relative to last winter.
The upshot: Homebuyers are focused on affordable markets. The latest Wall Street Journal/Realtor.com Emerging Housing Markets Index points shoppers to housing markets offering a lower cost of living and thriving local economies that are attractive, but not overcrowded.
Researchers looked at data for the largest 300 metropolitan areas in the U.S. to determine the index’s winter 2023 ranking. They gave each area an index score based on eight factors tied to the real estate market, economic health and quality of life.
Home list prices in all but four of the top 20 markets came in lower than the December median price of $400,000 for a U.S. home for sale. The overall cost of living in the areas was nearly 8% lower than the national average.
Although effective property tax rates in the markets are in line with the U.S. average of 1%, the estimated outlay was about half as low as a year ago, when lower real estate tax rates could not offset the effect of more expensive housing markets.
See the gallery for the 15 hottest up-and-coming housing markets, according to Realtor.com and The Wall Street Journal.
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