U
S home sales remained sluggish in 2024 due to high mortgage rates and prices. Despite affordability issues, cities like Charlotte and Knoxville in the Southeast saw strong demand. Analysts predict a potential rebound in 2025 driven by lower mortgage rates.
The National Association of Realtors noted that home sales were soft for the third consecutive year, with mortgage rates and home prices down from their peak but still posing significant affordability challenges. This has led to millions of would-be buyers opting to rent instead.
However, sellers in hot markets continued to benefit as buyers competed fiercely for scarce properties in coveted cities. Business Insider analyzed data from six sources to identify the most popular US real-estate markets in 2024, focusing on migration patterns, rents, rental-market competitiveness, search interest from homebuyers, and home price growth history and projections.
The analysis revealed that eight of the top 10 most popular markets were located in the Southeast, spread across North Carolina, Kentucky, and Tennessee. North Carolina's inbound rate was tied for second in the nation at 63%, with four hot markets driving demand: Winston-Salem, Greensboro, Charlotte, and Durham.
Tennessee had a similar high inbound rate of 62%, with Knoxville being one of the most competitive smaller markets despite modest rent growth. Memphis saw significant rent growth and is expected to experience home price growth next year. Kentucky's Lexington and Louisville also made the list, with Lexington boasting a high rental market competitiveness score and Louisville being the top trending rental market in 2024.
Jonathan Miller, co-founder of real-estate firm Miller Samuel, attributed the Southeast's popularity to its relatively warm climate and abundant housing inventory. He noted that the region's affordability makes it an attractive option for buyers.
Washington, DC, represented the mid-Atlantic with a high inbound rate and a strong ranking in homebuyers' searches, driving up prices by 10.2%. New Haven, Connecticut, was the hottest market, with the nation's fastest year-over-year rent growth in December at 35.7% and significant home price growth.
Looking ahead to 2025, some real-estate analysts predict a potential rebound in sales driven by lower mortgage rates, while others are more skeptical. The National Association of Realtors forecasts a 7-12% increase in home sales next year, including an 11% jump for new units. However, Realtor.com's sales forecast is more tempered at 1.5%, and veteran real-estate analyst Jonathan Miller expects only a 3% increase.
Miller believes that mortgage rates will likely remain above 6%, weighing on demand, but notes that there is still upside potential in transaction volume despite higher mortgage rates. He predicts that buyers will continue to seek out affordable markets with abundant inventory, which are often correlated with the Sun Belt region's popularity in 2024.
