Not every city or metro is feeling the freezing effects of higher mortgage rates and dwindling consumer confidence. The local nature of real estate means that a snapshot of housing should look like a spectrum, with gradients of up and down, hot or not. At any given time, it is important to recognize which places are moving against the current, heating up as the rest of the country or region cools.
That is the aim of Bankrate’s Housing Heat Index, which seeks to mash several different metrics together, including home price appreciation, active listings and the local job market, to rate the “heat” of a given housing market.
The most recent edition of this research found broadly that housing heat is running parallel to climates—with the hottest markets in the South and Midwest, while many Northeast and Pacific Northwest metros sit mired in gloom. Additionally, the muggy Pacific Northwest is currently rained out, with many cities in that region ranked as some of the least healthy for housing.
Within every region, though, there are cities that rank “hotter” by Bankrate’s methodology. While that doesn’t necessarily mean they are strong by every single metric, or indicates a given city has the fundamental strengths to maintain a healthy housing market into the future, these metros all offer something very positive for those involved in real estate.
Here are the 5 “hottest” metros in each region:
5th Hottest – Charleston, South Carolina
The five hottest housing markets in the United States are all located in the South, so these rankings also serve as ranking of the hottest markets overall. Charleston, at five, rated extremely high in the job growth metric, at fourth overall, with strong population growth as well, even though it was below average for active listings (168th overall). Home prices have gone up 10% in the last year, according to Rocket Homes, and inventory rose 77%, according to the local REALTOR® association.
4th Hottest – Charlotte, North Carolina
Charlotte was especially strong in home price appreciation, ranked 15th out of 212 cities for price gains, and top 50 for both population growth and days on market for homes. But the unemployment rate sits higher in Charlotte than other hot housing markets, and the city’s overall rating for its labor market was only a little above average.
3rd Hottest – Sarasota, Florida
Florida has stoutly resisted the broader trend of price declines across the country, and Sarasota is no exception, ranked second for price appreciation. It also boasted a strong ranking in labor metrics. But good luck finding a home in order to take advantage of all this—the city was also ranked in the bottom 10 (206th) for active listings, as a lack of inventory continues to plague the state.
2nd Hottest – Fort Myers, Florida
Very similar to Sarasota, Fort Myers offers incredible price appreciation and a lot of job opportunities, but is sorely lacking in homes for sale. Ranked one spot behind Sarasota in active listing, the two cities—only an hour’s drive apart—offer similar geographies. Fort Myers, however, holds the advantage over Sarasota in jobs and how fast homes sell, while trailing only slightly in price appreciation.
1st Hottest – Gainesville, Georgia
Located in the Atlanta exurbs, Gainesville offers a top 25 job market with extremely healthy population growth along with top five home price appreciation. Along with 2.6% unemployment, the Atlanta area was also named the top metro to watch “in 2023 and beyond” by the National Association of REALTORS® back in December. Like other hot markets, Gainesville has suffered from a lack of inventory, but is slightly more affordable than many other cities on this list—just below the national median at $375,000.
5th Hottest – Manchester, New Hampshire
Manchester earns the designation of a “hot” market based on a tremendous number of active listings (fifth most out of 212 metros) and the speed of sales (also fifth for days on market). A top 25 job market doesn’t hurt either, even though price appreciation is almost exactly average (106th). Like many other places in the Northeast, Manchester has seen slow population growth (ranked 171st). Zoning restrictions have played a part in housing issues, according to experts, though New Hampshire recently created a “zoning atlas” to help policymakers address these issues.
4th Hottest – Reading, Pennsylvania
Reading also joins this list with transactions humming along—top 20 for active listings, and ranked 32nd for days on market. Though with only an average job market and weaker population growth against an acute national inventory crisis, just having homes available is enough to make Reading notable. The city is also extremely affordable, with a median home price around $164,000, according to Rocket Homes—also a rarity today.
3rd Hottest – Harrisburg, Pennsylvania
Like nearby Reading, Harrisburg has more listings than the average town (52nd overall), but with a significantly stronger job market (40th compared to Reading’s 88th). Again, affordability likely has something to do with Harrisburg’s strength, with a median price of $170,000, according to Rocket. On the other hand, higher unemployment and a more sluggish housing market (99th overall for days on market) were less positive.
2nd Hottest – Trenton, New Jersey
Very different from the more rural Pennsylvania cities, Trenton offers solid price appreciation (51st overall) along with lots of listings and a fast-moving market (22nd for days on market) in a more urban environment. Despite a barely above-average job market, Trenton’s overall strengths make it one of the hottest markets in the Northeast.
1st Hottest – Lancaster, Pennsylvania
Unsurprisingly, just like the other two Pennsylvania markets in the top five, Lancaster offers a huge number of available homes, ranked 18th for active listings. But what pushes the city above other Northeast metros is great price appreciation. At 42nd overall, Lancaster offers plenty of value for its relatively affordable properties (with a median price of around $250,000, according to Rocket). Atlantic City, New Jersey, was the only Northeast metro with higher price appreciation.
5th Hottest – Springfield, Missouri
Springfield earns its ranking with an above-average price appreciation (at 63rd) and very strong fundamentals. With some of the lowest unemployment of any metro measured (ranked 6th), and a population that has seen consistent growth over at least a decade, Springfield’s “hot” market is more about a strong future than a booming real estate scene today, as it ranked only average for active listings (118th overall) and days on market (92nd).
4th Hottest – Bloomington, Illinois
A couple hours drive from Chicago has seemingly given Bloomington both the space and the opportunity to heat up. Ranked a very respectable 57th for price appreciation, and an even better 48th for active listings, finding a median-priced home in the city (at around $218,000) should be easier than in many other parts of the country. Bloomington also boasts very low unemployment, though like many other Rust Belt cities, population growth has stuttered in recent years (ranked 143rd).
3rd Hottest – Beloit, Wisconsin
Beloit offers the advantage of easy access to three major Midwestern cities—with Milwaukee, Madison and Chicago all within an hour’s drive. For that reason, homes have likely been moving quickly in Beloit, with the city ranked second in the Midwest and 22nd overall for days on market. It also offers very good value, with a median home price under $200,000 and price appreciation also ranked second in the region (36th overall).
2nd Hottest – Jefferson City, Missouri
Solid across the board, Jefferson City ranks in the top third of all cities for price appreciation, job market, active listings and days on market. With the lowest unemployment rate of all Midwest cities surveyed, and the fourth best job market in the region, Jefferson City offers great opportunities for professionals—also within a two-hour drive of St. Louis for hybrid workers.
1st Hottest – Appleton, Wisconsin
The hottest market in the Midwest combines an extremely low unemployment rate (1.9%, according to the Bureau of Labor Statistics, good enough for second out of all 212 cities) and a lot of homes available (sixth in the Midwest and 21st overall). Located in the northern part of the state, Appleton offers access to both major cities and vacation areas. And solid price appreciation is enough to overcome sluggish population growth and a slower pace of transactions (110th for days on market) to boost Appleton to the top spot in the region.
5th Hottest – Visalia, California
Located in central California within driving distance of Fresno, Visalia manages to be the fifth hottest market in the West while simultaneously having the worst unemployment rate out of every city analyzed across the nation—a brutal 11.3%. The good news is that it is still a large improvement over the last decade, when the unemployment rate reached 17.5%. And people seem to be drawn to this growing market, as Visalia ranks above average for both population growth and new listings.
4th Hottest – Tucson, Arizona
Tucson is a bottom-quartile state for job growth and active listings, meaning buying and affording a home will be a challenge to start off with. But for those who can find work and a good property, Tucson has defied the price declines that recently hit Western markets, ranked 62nd for home price appreciation. With decent population growth and homes that are still moving relatively swiftly after being listed, the city offers a warmer market than most others in the region.
3rd Hottest – San Jose, California
Despite the fact that the city is struggling to attract or keep residents, and remains incredibly unaffordable, tech-centric San Jose makes the list on the sheer amount—and speed—of home sales. Ranked second in the whole country for both active listings and days on market (with an average of 20 days to sell, according to Rocket), the city remains very desirable, with more homes available than any other place in the country—at least for those who can afford the $1.2 million median price.
2nd Hottest – Santa Barbara, California
Down in Southern California, Santa Barbara’s housing market also offers a lot of active listings at an expensive price tag, along with significantly better price appreciation compared to its neighbor to the north (ranked 53rd overall, and second in the West). But the ritzy beach region also struggles in the job market, with only average job growth and a declining population—something that has plagued the state overall.
1st Hottest – Santa Cruz, California
The hottest market in the West is in some ways similar to nearby San Jose. But while San Jose has below-average job growth, Santa Cruz ranks a very strong 35th across the whole country in that metric (though still with a high unemployment rate). With rankings for active listings and days on market both in the top 30, transactions are humming along in the city, even as the region overall has seen sales fall. And strong price appreciation (34th overall, first in the West) further cements Santa Cruz as the current hottest market in the West.