With prices and mortgage rates soaring, homebuyers are flocking to certain parts of the Midwest and metropolitan areas in the Northeast and Midwest to find the right balance between affordable prices and attractive locations, according to Realtor.com’s annual list of the “hottest zip codes” in the U.S.
The U.S. housing market is in a deep sales slump, due to the double whammy of high borrowing costs and home prices that have kept many homebuyers out of the market. But don’t expect properties in these zip codes to stay on the market very long, according to Realtor.com. Properties in these zip codes were viewed between 2.9 and 5.2 times more often than the average U.S. home listing during the first six months of 2024 and spent between 32 and 45 fewer days on the market.
As was the case last year, ZIP codes in the Midwest and Northeast again dominated Realtor.com’s top 10 list. Three of the 10 most popular ZIP codes are in the Midwest, where average home prices in June were 24.6% below the national median. The remaining seven ZIP codes are in the Northeast, where average home prices in the three cheapest neighborhoods were 28.8% below the U.S. median in June.
“The most popular zip codes underscore how important this year’s homebuyers are to their home’s affordability,” said Hannah Jones, senior economic analyst at Realtor.com. “Prices in each zip code are either lower than the national median or lower than the surrounding metropolitan areas.”
The real estate website calculated the most popular zip codes by measuring the number of unique views of properties listed on its site and the number of days each listing remained active.
The location is also important
According to the Realtor.com report, not all home buyers are looking at price. Many buyers also want to take advantage of the strong economies in the cities of Columbus and St. Louis. Living near major economic centers offers consumers the benefits of city living without sacrificing space, affordability or quality of life.
For example, No. 4 on the list, zip code 07920, or Basking Ridge, New Jersey, offers more affordable housing options within commuting distance of New York City. Although the median asking price for the area is nearly a million at $967,000, it’s still a relative bargain compared to prices in the Big Apple. As of June 2024, the median asking price per square foot in the New Jersey city was $365, or 33.6% less than the surrounding metropolitan area average.
Here’s a look at the zip codes with the toughest competition and what buyers in those markets can expect in the future.
Zippers that made it into the top 10
For the second year in a row, Gahanna, Ohio, with the 43230 zip code, ranked No. 1. Home to Ohio State University and a vibrant dining and arts scene, Gahanna offers all the “amenities and quality of life benefits of a larger city, but at a lower price,” the report said.
The small Ohio town of 35,000 residents attracted significant interest from buyers in the nearby capital of Columbus, which accounted for over half of the views of Gahanna listings on Realtor.com.
“The high level of viewership within the metropolitan area suggests that homeowners are looking to the hot Columbus market to potentially cash in on the equity in their existing homes to finance an upgrade or possibly the purchase of an investment property,” the report said.
Other top Midwest zip codes that made the list include zip code 63021 (Ballwin, MO) at number 2 and zip code 46322 (Highland, IN) at number 9. All three were also on last year’s list.
The Northeast also proved to be a hotspot for buyers, with seven of the top 10 most popular zip codes located in this region. Among the zip codes that made the list are 01970 (Salem, MA) in third place, 07920 (Basking Ridge, NJ) in fourth place, and 14609 (Rochester, NY) in fifth place.
Demand for homes in popular zip codes in the Midwest and Northeast has increased despite an average 5.7% increase in inventory annually through the first half of 2024. However, increased demand has pushed median asking prices in these areas up by an average of 7.4%, compared to a 0.4% increase nationally.
Meanwhile, buyer interest has waned in regions to the South and West, which did not make this year’s list, according to Realtor.com, and have become less affordable due to a post-COVID price surge and increased housing supply.
What can we expect from the markets in the future?
Realtor.com’s Jones expects the Midwest and Northeast to continue to have a strong position in the market, especially as buyers continue to look for affordable options outside of major metropolitan areas.
But when demand peaks in these areas, consumers should also expect further price increases. That’s not to say shoppers can’t get a bargain, Jones says, but they need to keep a close eye on the market and be ready to pounce with a deal in hand when the moment arrives.
“Despite the recent price increase, the country’s hottest neighborhoods still offer buyers relatively affordable homeownership,” she said. “However, buyers will face stiff competition in these red-hot markets.”
The Realtor.com analyst said buyers can stay one step ahead by saving searches on their website or exploring the “Market Hotness” map layer, which allows users to compare demand in different zip code areas.
