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- Overall, markets in the top 20 on the index skew larger, with an average population of close to 900,000.
- And most cities on the index featured strong economies, boasting unemployment rates below 3.6 percent and average wages of around $1,120 weekly.
- Johnson City, Tenn., sitting in the northeast corner of that state, finished in the top spot.
Homebuyer demand remained strong in low-cost cities with healthy economies and robust community features amid a broader backdrop of a nationwide housing market reset, according to a new report.
Soaring mortgage rates and high listing prices are pushing some buyers out of many major markets and into lower-cost areas across the country.
The Wall Street Journal-Realtor.com Emerging Housing Markets Index released Tuesday reviewed data for the largest 300 metropolitan areas to determine where buyers focused on affordability are heading.
“Nationwide, housing activity has slowed as buyers contend with higher housing costs,” Realtor.com chief economist Danielle Hale wrote in the report.
“As a result, home shoppers are generally seeing more homes available for sale, longer times on market, and slower home price growth. That’s also reflected in the top markets,” Hale added.
Overall, markets in the top 20 on the index skew larger, with an average population of close to 900,000. And most cities on the index featured strong economies, boasting unemployment rates below 3.6 percent and average wages of around $1,120 weekly.
Johnson City, Tenn., sitting in the northeast corner of the state, finished in the top spot. Here there are 283 active listings with a median price of $379,000 –well below the national median list price. The average home stays on the market in Johnson City for 42 days, nearly a 38 percent change since last year.
The Visalia-Porterville, Calif., metro area, where the median list price is $400,000 came in second on the index. This central California metro moved up eight spots from the summer index.
Although most cities on the index feature healthy economies with unemployment rates below the national average, the Visalia-Porterville, Calif metro area is among two exceptions in the top 20. The report attributes the strength of this market to its nature and national parks.
Elkhart-Goshen, Ind.; North Port-Sarasota-Bradenton, Fla; and Fort Wayne, Ind.; round out the top five on the emerging markets index. Each of these metro areas has an unemployment rate below 3 percent.
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Meanwhile, the larger market continues to cool as the U.S. saw a record price slowdown in August, according to data released Tuesday.
The S&P CoreLogic Case-Shiller Index released Tuesday shows a 13 percent annual gain in August for home prices, but a sharp 2.6 percent drop from July to August. That’s the largest monthly drop on record.
“As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive, and housing becomes less affordable,” Lazzara said. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate.”
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