Realtor.com: 10 hottest housing markets—and 10 coldest markets

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Heading into 2023, numerous forecast models predicted that deteriorated housing affordability would translate into a modest U.S. home price correction. On a national scale, a lack of resale supply has stopped a correction from materializing. However, digging into pricing data reveals that certain markets in Texas and Louisiana have experienced modest corrections this year.

Could we see more regional bifurcation in 2024?

To gain insights into which regional housing markets might still be vulnerable to pricing weakness in 2024, ResiClub examined Realtor.com's latest "Hotness Score."

Realtor.com, which has the self-proclaimed "most comprehensive and accurate database of MLS-listed for-sale homes in the industry," issues a “Hotness Score” every month for the nation's 300 largest metro-area housing markets. The “Hotness Score” is described as an equally-weighted composite metric of a geography’s “Supply Score” and “Demand Score.” Those scores take into account factors like days on market, inventory shifts, pricing shifts, and unique listing page viewers per property.

A lower score indicates a softer (cold) housing market, while a higher score indicates a stronger (hot) housing market

Click this link to view an interactive version of the map below.

Realtor.com's latest "Hotness Score" indicates that housing markets along the Gulf Coast, including places like Lake Charles, La., and College Station, Texas, remain the weakest. Some of these Gulf markets are experiencing a pullback in pandemic-era migration, coupled with significant increases in home insurance premiums and increased household distress. In certain pockets, such as Austin, home prices got too far detached from underlying fundamentals during the boom.

On the flip side, there remains a great deal of resilience in many Northeast and Midwest housing markets. Places like Manchester, N.H. and Rochester, N.Y., just don’t have enough supply to match demand. The result? Elevated house price growth.

You might notice that Realtor.com’s "Demand Score" and "Supply Score" appear quite similar in most markets. My theory? Some of the metrics that Realtor.com may include in its "Supply Score," such as active listing growth, also serve as a proxy for demand, in my opinion. Indeed, a significant decline in demand can lead to homes lingering on the market, causing inventory to rise, even if the total number of homes available for sale remains constant.