Phoenix ranks No. 2 among hottest housing markets in U.S.
Whether you are interested in selling your home for a large profit or researching the most friendly market for first time home buying, House Method conducted a study to rank the hottest (and some of the cooler) housing markets in the U.S. — and Phoenix ranks No. 2 among the hottest housing markets in the U.S.
READ ALSO: The 3 hottest neighborhoods in Arizona
The housing market has exploded in recent years due to fluctuating mortgage rates, high demand accompanied by low inventory, as well as remote working opportunities allowing millions to rethink their home base. Americans have begun to rethink their priorities in a living space, many prioritizing space and comfort while others have flocked to bustling metropolises, leading to an exponential increase in home ownership.
We analyzed data on the 100 largest MSA’s (Metropolitan Statistical Areas) and ranked them according to seven factors, such as affordability, inventory and population growth. Read on for the complete rankings and explanation of the methodology behind this study.
Some of the most interesting findings:
• Home prices increased by an average of 21% since 2021
• The top 10 markets rarely have listings sit on the market for more than 15 days, 40% less than the national average (25 days).
• Many of the hottest housing markets are also some of the least affordable as demand increases and inventory decreases
• Home equity has skyrocketed, allowing sellers to make huge profits
• Home prices are projected to increase another 14.9% before 2023, even with steep mortgage rate increases
Main findings about hottest housing markets
Below you’ll find the cities where homes are flying off the market fastest in ranked order. The table below shows the rank, total score, and specific factor-category rank. It’s searchable and sortable so take a look and see how your city stacked up!
Summary of hottest housing markets
Our analyses found that Tampa-St. Petersburg-Clearwater, Florida, tops the list as the hottest housing market this year. Homes are sitting on the market for the least amount of time before selling, selling for top dollar, and attracting new residents at a rapid rate. Low inventory combined with a quick sale rate contributed to its high score – and it’s important to note that many of the top spots ranked poorly for affordability.
As these hot housing markets continue to gain traction, we can assume that affordability will continue to dwindle. The other top 5 spots were rounded out by:
• Phoenix-Mesa-Scottsdale, Arizona
• Austin-Round Rock, Texas
• Seattle-Tacoma-Bellevue, Washington
• San Jose-Sunnyvale-Santa Clara, California
Jackson, Mississippi, Bridgeport-Stamford-Norwalk, Connecticut, Greensboro-High Point, North Carolina, McAllen-Edinburg-Mission, Texas and Winston-Salem, North Carolina received the lowest ranking for hottest housing markets. These markets remain cooler than those who ranked highly due to ample housing inventory and slower population growth. Although it is still a seller’s market, these MSA’s may not fly off the market quite as quickly as their high-ranking counterparts.
To find the hottest housing markets in 2022, we looked at data for the 100 largest MSA’s (Metropolitan Statistical Areas) in the United States. We ranked the cities using three categories:
• Population Growth
In all, there were 7 factors across those three larger categories that are listed below along with their corresponding weights. Each city was graded on an 85-point scale, with a score of 85 representing the hottest housing market.
Finally, we determined each city’s weighted average across all categories to calculate its heat score and used the results to rank-order our sample.
• Home price change percentage 2021 vs 2022—Double Weight
• Homes price change percentage 2012 vs 2022—Full Weight
• Average price per square foot (measured in hundreds)—Full Weight
• Majority of homes available below and above the national average of $428,700 (calculated with average home price and factored into a yes or no ratio)— Half Weight
• Average active home listing per month—1.5 Weight
• Average days on the market before pending sale—Double Weight
Population Growth—5 points
• Population growth change percentage from 2010 census vs 2020 census data —Half Weight
• World Population Review