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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 of this 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 the market, inventory shifts, pricing shifts, and unique listing page viewers per property.
Realtor.com’s latest “Hotness Score” indicates that housing markets along the Gulf Coast, including places like Lake Charles, Louisiana, 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, New Hampshire, and Rochester, New York, just don’t have enough supply to match demand. The result? Elevated house price growth.
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