The US States with the Hottest Housing Economies
The Covid-19 pandemic has significantly changed the conditions and environment of the housing markets in the United States. Nevertheless, some states have successfully defeated the adversities. In this article, we have shortlisted some of the states that have the strongest housing economies at this moment. All of these markets have shown strong forecasted growth for home values, strong economic dynamics including lofty job growth, fast-moving supply, and a good number of buyers.
The Criteria We Chose
While creating the shortlist for the hottest housing economies, we considered how the markets have been dealing with the pandemic-caused changed scenario and how they are likely to perform in a near future. While finalizing this ranking, we analyzed six major data points that are the followings:
- Annual home price appreciation
- Share of mortgages past due
- Unemployment rate
- Annual job growth
- State-wide cost of living index
- Tax burdens
These data points are the most dominating factors in the housing heat index, and so we have finalized our shortlist depending on these dynamics.
6 US States with the Hottest Housing Economies
Depending on the data points mentioned before, we have finalized this shortlist of the 5 states that have the Hottest housing economies at this moment:
1. Utah
From March 2021 to March 2022, the home values in Utah jumped by 26.8%. Delightfully, Utah has also reported the lowest unemployment rate in the United States in March 2022. According to the tax foundation, even the tax burden in Utah is the lowest among all the states in the nation.
An extinguishing demand is heating up the real estate market in Utah, which is being fueled by the limited inventory. The low mortgage rate and positive economic condition are allowing the residents of this state to chase the increasing home prices. Buyers are often willing to offer $20,000-$30,000 over the listing price to secure a home. Dozens of buyers are competing for each entry-level home.
2. Colorado
Colorado has become one of the hottest housing markets in the United States, thanks to its booming economy and attractive lifestyle. Denver, the state’s largest city, is at the center of it all. With its low unemployment rate, high median income and influx of new residents each year, it’s no wonder that real estate prices have been steadily increasing in recent years.
The state’s population growth rate is 2.5%, which is higher than the national average of 1%. This influx of new residents helps sustain economic activity and create more demand for housing. Additionally, with an unemployment rate that remains well below the US average at 3%, there’s an abundance of quality jobs in Colorado that attract buyers from out-of-state who are eager to start their next chapter in life here.
3. Montana
In Montana, Home values have climbed around 25% within the timeline we have mentioned before. In this state too, job growth shows plenty of positivity, and the tax burden is quite moderate.
Another factor that is contributing to the hot real estate market is the state’s high-tech sector. In Montana, high-tech sectors pay salaries that are more than double the median earning. As there are people who can afford expensive homes, sellers are also increasing the prices of their homes.
4. Florida
Florida is the state that shows the highest increase in home prices. Home values for the Sunshine State have increased by 30% over the last year. The job growth here is strong, and the taxes are low.
The secret to such an astounding increase in the home price in Florida is nothing but the attractiveness of the market. Thanks to the thriving job market, no state income tax, and plenty of sunshine – people from the Northeast and West Coast are luring to Florida.
5. Arizona
In Arizona, home values have surged around 28% over the last year. As many people are shifting from the western states such as Washington and California, the housing market in Arizona has been experiencing too much demand. However, the supply is just not enough to fulfill the increasing demand.
Because of the low cost of living, increasing job opportunities, and excellent health and education quality, Arizona is considered an excellent place to live in. The extensive transport network of the state just works as a bonus.
Phoenix is one of the best cities to live in Arizona; considering the ample amenities, high standard of living, affordable house price, enriched economy, excellent weather conditions, and amazing scenic beauty.
6. Tennessee
In Tennessee, home prices are up by almost 26% from the last year. While job growth in this state is quite strong, the cost of living is quite moderate. The city is highly popular with retirees, because of the moderate cost of living, lower tax burden, excellent weather, and more.
Properties in the Tennessee real estate market are often selling for way over the listing price. This is the result of low inventory, increasing demand, and the impact of out-of-state buyers who are able to pay above the asking price, in cash.
The housing market is hot all over the country because of the limited inventory and increasing demand. However, the markets we have discussed above, are experiencing more activities as the economic condition is permitting people to engage in real estate. If you are thinking of buying a property in one of these states, it can be a great idea considering the price growth opportunities and standard of living these states characterize.
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