Unlocking Homebuyer Potential: 10 Cities Poised for Housing Market Revival

Photo byRealtor.com; Getty Images

For years, soaring mortgage rates have kept many homeowners stuck in their current homes, reluctant to sell and face higher borrowing costs. But as mortgage rates begin to recede, a fresh wave of opportunity is emerging across the U.S. housing market. A recent analysis reveals which cities are set to experience a swift rejuvenation, thanks to a significant number of homeowners now positioned to refinance or sell at lower rates.

Cities on the Verge of a Housing Boom

As mortgage rates dip below 6.5% for the first time in over a year, certain metro areas are brimming with potential for market activity. These locations have a high proportion of recent home sales when rates were over 6.5%, meaning a significant portion of homeowners in these areas are now “unlocked” and ready to make a move.

Top 10 Cities Ready for Market Revival:

1. Naples, FL: Leading the pack, Naples boasts 15.2% of its mortgages above the 6.5% threshold. With a median list price of $770,000, this city is primed for a surge in activity.
2. St. Louis, MO: In second place, St. Louis has 13.9% of its mortgages in the higher rate bracket. The city’s more affordable median list price of $313,900 could attract a flurry of new buyers.
3. Myrtle Beach, SC: With 13.4% of mortgages above 6.5%, Myrtle Beach, where the median list price is $339,900, is set for a lively market rebound.
4. Cape Coral, FL: Cape Coral, at 12.4%, is another Florida city where homeowners are eager to benefit from lower rates. Its median list price stands at $449,950.
5. Miami, FL: Miami, with 11.7% of mortgages over 6.5%, also shows promise. The city’s higher median list price of $535,000 reflects its upscale market.
6. Albuquerque, NM: At 11.6%, Albuquerque’s market is ripe for activity. The median list price here is $419,000, offering a balance between affordability and opportunity.
7. Kansas City, MO: With 11% of mortgages above the threshold, Kansas City’s median list price of $410,000 makes it a noteworthy contender for increased market activity.
8. Fort Wayne, IN: Fort Wayne, showing 10.5% of mortgages above 6.5%, features a median list price of $319,900, hinting at a potentially accessible market for many buyers.
9. Oklahoma City, OK: At 10.4%, Oklahoma City’s housing market, with a median list price of $325,903, is poised for a refresh.
10. New Haven, CT: Rounding out the list, New Haven has 10.3% of its mortgages above 6.5%. Its median list price of $424,925 suggests a market ready for rejuvenation.

A New Dawn for Homeowners

According to Realtor.com’s senior data analyst, Hannah Jones, as mortgage rates continue to fall, these cities are expected to witness a surge in selling and refinancing activity. “Homeowners who have felt ‘locked in’ by high mortgage rates are likely to feel increasingly eager to sell as rates improve,” Jones explains.

Recent population growth and rising home prices in these cities have already set the stage for a balanced market. For instance, Naples saw a staggering 69% increase in home prices from 2020 to 2023. As the housing market begins to thaw, buyers in these areas will benefit from increased inventory and a broader selection of homes.

Looking Ahead

The potential fall in mortgage rates to around 6.3% by the year’s end, as projected by the Realtor.com economic research team, could further invigorate these markets. Homeowners in these cities are well-positioned to capitalize on lower rates, making now an ideal time to watch for significant shifts in the housing landscape.