On Tuesday Ten-X, an online real estate transaction marketplace and the parent to Auction.com released its Top Single-Family Housing Markets Report for Fall 2017, covering the 50 largest housing markets in the nation—and ranking them based on strong buyer demand, home price appreciation, strong affordability, and economic and demographic growth.
The U.S. housing market is struggling to see sales progress amidst historically tight inventory levels, the report noted. A firm labor market, rising wages, and low mortgage rates are keeping homebuyers interested, but continuous confronts—such as the conflict between limited supply and high demand—in the market are keeping sales down.
Another challenge facing homebuyers is a potential spike in mortgage rates as competition between buyers along with the rising burden on affordability increases. In addition, Ten-X forecasts that “soaring student debt and relatively tight underwriting conditions,” could also cause a rate increase.
According to the report, despite the recent challenges faced in housing with the hurricanes, the labor market has averaged “around 148,000 new monthly jobs in 2017, while unemployment remains tight in the low-4 percent range.” Additionally, wage growth has been in the mid-2 percent range year-over-year.
Peter Muoio, Chief Economist at Ten-X said the ongoing expansion of the U.S. economy remains the primary driver behind top-performing housing markets, yet the overall housing market is struggling to make significant gains.
"Labor market increases remain strong; however, wage growth has been somewhat underwhelming,” Muoio said. “This has become a growing concern as the cost of housing continues to rise, limiting affordability prospects for many borrowers.”
Despite all of the market challenges, which cities ranked the best for Fall 2017?
According to Rick Sharga, EVP of Ten-X, the cities at the top of the list have consistently seen the most favorable market factors.
"However, hot housing markets can come and go,” Sharga said. “It remains to be seen what impact Hurricanes Harvey and Irma will have on construction labor forces and housing inventory in Texas and Florida. Meanwhile, Southern California and Northeast markets continue to cool due to soaring prices and low inventory, which keeps homeownership out of reach for many first-time buyers."
Top Five Markets at a Glance
To view the full ranking, along with the rest of the data report, click here.