Dive Brief:
- Vallejo, CA, and San Francisco again led Realtor.com’s monthly list of the most active housing markets in the U.S. Of the 20 cities ranked in June, nine were in California. The highest-ranking non-California markets on the list were Kennewick, WA (No. 3), Columbus, OH (No. 5), and Detroit (No. 6).
- The lack of available for-sale homes has kept prices high. The national median home price has already surpassed $250,000 and Realtor.com projects it will be close to $275,000 by the end of the month.
- The biggest leaps came from Waco, TX (18 spots), and Detroit (12 spots). The largest drop on the list from last month occurred in Midland, TX, which went from No. 8 to No. 15.
Dive Insight:
Despite being about 100,000 homes short a year of what’s needed to meet the demand, California has had a strong presence up and down the Realtor.com list for many months. Although there is a shortage of for-sale homes in California, especially affordably priced ones, the market there remains active as its population continues to rise.
Meanwhile, Kennewick, WA, which claimed the highest non-California spot on the hottest housing markets list, was part of the fastest-growing job market in Washington state last year. When it comes to finding a place to live, people tend to go where the jobs are. Commercial and residential construction, as well as manufacturing, hospitality and education have driven job growth in the state.
On the other side of the country, Rust Belt cities also turned up among the most active housing markets in June, in part because the region offers more affordable housing options, an attractive option to first-time homebuyers.
Availability, along with affordability, will also continue to be a factor in where housing activity is the strongest. As wealth returns to the middle class and housing inventory continues to contract, buyers earning modest salaries may opt for housing outside of bigger, coastal cities. For example, 61.3% of the housing listings in Minneapolis were considered affordable to median-income earners versus just 5.6% of the listings in San Diego, according to Redfin.
