Texas and Florida metros dominate the best places for home buyers in Zillow’s new market heat index, securing seven of the top 10 spots.
“Prospective buyers in most markets today are feeling less intense competition than in recent spring shopping seasons. Pressure is easing up as mortgage rates raise costs and sellers return,” said Skylar Olsen, Zillow chief economist. “However, the pool of homes for sale remains remarkably low. This means the nation remains a seller’s market despite high mortgage rates — homes are selling faster, with more buyer interest over any one listing, than pre-pandemic.”
According to a news release, strong construction in Texas and Florida has helped restore inventory levels in those states, easing competition. Austin and San Antonio are two of just three markets with more inventory now than before the pandemic, while Tampa, Orlando and Jacksonville have among the smallest deficits.
The top market for sellers is Buffalo, New York, forecast by Zillow in January as the hottest market of 2024. Among the top metros for sellers are more expensive (and inventory-constrained) coastal tech hubs, relatively affordable spillover markets in the Northeast — Hartford and Providence — and hot Upper Midwest metros Milwaukee and Minneapolis.
Zillow’s new market heat index visually represents buyers’ urgency or sellers’ confidence in an area and shows how that’s changed over time. It takes into account the share of homes that sell quickly, the share of homes with a price cut, and buyer engagement with active Zillow listings in a market.
According to Zillow, mortgage rates that spiked above 7% for the first time this year, along with these infusions of inventory, held competition steady at a time of year when it normally ramps up. U.S. home values grew 1.2% from March to April and are 4.4% higher than a year ago. That’s a slight slowdown from 4.6% annual growth seen last month. The typical U.S. home is now worth $359,402.
