With home prices and mortgage rates posing a hurdle to many homebuyers, not to mention other economic headwinds like inflation, there are a lot of markets left in the dust lately with very little activity. So where can homebuyers look for booming markets that have affordable prices and a good economic area?
WalletHub’s new study compared 300 cities of varying sizes across 17 key indicators of housing-market attractiveness and economic strength—ranging from median home-price appreciation to job growth—to determine the best markets for home buying in 2023.
Overall, the south dominated the list, on trend with the region’s generally lower home prices and cost of living. Texas alone claims four spots, including the top two.
Here are the top 10 best markets of 2023:
1. McKinney, Texas
- Total score: 74.41
- Real estate market rank: 2
- Affordability and economic environment rank: 2
2. Frisco, Texas
- Total score: 74.27
- Real estate market rank: 3
- Affordability and economic environment rank: 1
3. Nashville, Tennessee
- Total score: 71.71
- Real estate market rank: 1
- Affordability and economic environment rank: 96
4. Denton, Texas
- Total score: 71.67
- Real estate market rank: 4
- Affordability and economic environment rank: 24
5. Cary, North Carolina
- Total score: 70.03
- Real estate market rank: 8
- Affordability and economic environment rank: 13
6. Allen, Texas
- Total score: 69.88
- Real estate market rank: 10
- Affordability and economic environment rank: 5
7. Durham, North Carolina
- Total score: 69.87
- Real estate market rank: 6
- Affordability and economic environment rank: 48
8. Austin, Texas
- Total score: 69.63
- Real estate market rank: 7
- Affordability and economic environment rank: 28
9. Port St. Lucie, Florida
- Total score: 69.54
- Real estate market rank: 14
- Affordability and economic environment rank: 3
10. Gilbert, Arizona
- Total score: 69.37
- Real estate market rank: 12
- Affordability and economic environment rank: 6
Major takeaway:
The challenges plaguing the market have left many wondering whether now is a good time to buy, even in the best markets, and what economic factors help to distinguish this. Here is what Wallethub reports that real estate experts had to say:
“It depends on individual situations. If a buyer finds a home that meets their needs and doesn’t plan on selling the property within 5-7 years, then I would not hesitate to go ahead with the purchase. Interest rates are more than double what they were 18 months ago, and as such, homebuyers with mortgages are likely to be hesitant to trade a 3% rate for a 7% rate. This is impacting the amount of housing supply, which in turn is driving up the prices of available housing, both for purchase and rent.” –Bennie D. Waller, Ph.D., a William Cary Hulsey Faculty Fellow in the Department of Economics, Finance, and Legal Studies at the University of Alabama
“Yes, in most parts of the country, now is a good time to buy because sellers are willing to negotiate on price and terms. Although many people pay attention to interest rates (which are substantially higher today than they were 12 or 18 months ago), I would advise buyers to pay more attention to job growth rates and unemployment rates within their metro area. In most parts of the country, small and midsize employers are hiring and growing, which means the local economies are strong and local markets are stable.” –Kelly Snider, Professor in the Department of Urban and Regional Planning and Director of the Certificate in Real Estate Development Program (CRED) at San Jose State University
“Now is a pretty tough time to buy a home in many markets due to a lack of inventory, a shortage of listings, and a fast market when a home does come up for sale. The cost of financing fees up front and long-term interest rates have tripled from the lows of the COVID era: 2.5–2.75% vs. 7.5% today! Today, 80% of all homes with mortgages have interest rates that are less than 5%. Yes, the smart $ refinanced when rates were low, and now they are thrilled to be “stuck” in an affordable home or mortgage; they cannot afford to move up or down due to new rates, income levels, and normal and strict qualifying ratios. The mortgage employment picture is terrible due to the fact that 70% of the mortgage loan activity was refinanced! No one refinances at a higher rate!” –John Baen, Ph.D., TAA Endowed Professor of Real Estate at the University of North Texas
For the full report, including rankings beyond the top 10, click here.
