What states are booming in real estate?

Real Estate Housing Market Statistics 2022 Overall Ranking State Median Housing Prices1 1 California 2 2 Texas 31 3 New York 8 4 New Jersey 6 46 more rows •

fitsmallbusiness.com - 10 States With the Strongest & Weakest Housing Markets

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Gina is a licensed real estate salesperson, experienced trainer, and former high school educator of 1,000+ learners. She writes for Fit Small Business with a focus on real estate content. As the national economy continues to adapt to the new normal, some housing markets are poised for growth and stability, while others continue to fall behind. States like California and Texas have the strongest real estate markets, while Kentucky and Mississippi are among the weakest. We analyzed local median home prices, available homes for sale, new construction, mean household income, and mortgage rates to determine the health of housing markets by state. Whether you’re an interested buyer or seller or a real estate agent who wants to offer a sound market outlook, read along to find out what state has the hottest real estate market, as well as other states where real estate is booming.

Top 5 Strongest State Housing Markets

Here are the five best real estate markets in the US, marked by a high volume of housing supply and new constructions. While mortgage rates and housing prices are higher than in other states, these are compensated for by favorable salary levels.

1. California

The Golden State has the strongest real estate market in 2022, ranking well in terms of income levels, new construction rates, and available homes. California’s housing inventory is at 27,227 and new constructions at 117,219, suggesting a healthier supply of houses compared to other states. The median home price of $505,000 is the country’s second-highest, reflecting strong buyer demand despite a relatively high mortgage rate of 4.39%. Despite these soaring numbers, the favorable average household income of $106,916 allows more homeownership affordability for locals. The housing market will continue to be highly competitive as buyers anticipate increasing mortgage rates and tight inventory, creating a sense of urgency to purchase a home. Aside from a well-performing local economy, California’s beautiful expanse of beaches, forests, and parks makes it extremely appealing to investors. The state’s sizable land area provides room for more inventory and new constructions. Its sunny coasts also draw in homebuyers and investors seeking waterfront properties. Overall, California is the best state to be a real estate agent.

2. Texas

Texas has the second strongest housing market on this list. The Lone Star State boasts an existing home inventory of 34,157 and the highest volume of new constructions at 261,951, giving homebuyers more listing options. Though the mean household income of $87,260 is lower than in other big states, homes are more affordable, selling at a median price of $172,500. Mortgage rates are also slightly lower than California’s, with an average interest rate of 4.04%. Texas’ growing housing market has greatly benefited from interstate migration during the pandemic, as reflected by the high number of new construction. With work-from-home opportunities becoming the norm, the state’s affordable housing will continue to attract homebuyers. Additionally, the growing population, respectable income per household, and sunny weather in Texas will further create buyer and investor opportunities for all budget levels despite increasing mortgage rates.

3. New York

New York’s housing market remained a juggernaut amid increasing interest rates. Boasting an existing home inventory of 39,463—the highest across all states—and 42,058 new developments, The Empire State exhibits strong buyer demand and brisk sales despite the ongoing inflation. Dubbed as “The City That Never Sleeps,” New York has a respectable average annual income of $101,945. This income level gives homebuyers more purchasing power despite the notoriously expensive median home cost of $313,700 and the higher average mortgage rate of 4.39%. While others were moving out of expensive cities at the height of the pandemic, some homebuyers and investors are flocking to buy houses in New York to lock in current mortgage rates and prices. With a massive inventory of preexisting homes, buyers have an advantage over home sellers. This might loosen up the competition for first-time buyers and allow them to negotiate a price that fits their budget.

4. New Jersey

On the border of New York is the Garden State, which also enters the list of strongest housing markets in 2022. Having a tighter inventory of 13,674, the median home price has shot to $335,000, making it a red-hot market. With 38,248 new developments annually and slightly lower mortgage rates of 4.28% compared to New York, New Jersey is set to meet the strong buyer demand. The mean household income of $114,691 is also the highest in the country, providing more purchasing power to New Jerseyans. While existing home inventory is lower than in other housing markets, the healthy number of new developments yearly indicates that construction firms are ready to invest in New Jersey. Unfortunately for first-time homebuyers, the expensive prices might discourage them from joining the bidding war. Higher-income homebuyers and investors with strong credit scores might find New Jersey more ideal than New York.

5. Hawaii

The exorbitantly high median home price of $615,300 in Hawaii is indicative of a red-hot market. This also reflects a stiff homebuying demand amid a low inventory of 2,358 existing homes and 3,460 new constructions. The average household income of $103,780 is the sixth highest in the country, which is favorable for locals planning to buy a home. Additionally, with a relatively lower mortgage rate of 3.99%, investors will find great opportunities in Hawaii. Despite the high-income levels, an average household might not still be able to afford a median-priced home. To qualify for a loan on a $600,000 house in Hawaii, the recommended minimum income is $110,895, which is higher than the current average income. Nevertheless, the market is ideal for investors who want to take advantage of the state’s low mortgage and property tax rates. Hawaii is also among the top 10 tourist destinations in 2022, which is advantageous for property investors with beach-front properties.

5 Weakest State Housing Markets

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The five weakest housing markets predominantly suffer from a low number of available homes and new developments as mortgage rates continue to increase. Household incomes are also low in some of these states compared to other housing markets in the country.

1. Kentucky

The Bluegrass State has the weakest real estate market in 2022. The low median home price of $141,000 amid a tight inventory of 4,237 existing homes and only 15,022 new constructions suggests a mild homebuyer demand. Furthermore, mortgage rates are at 4.51%, higher than in California and New York. The average household income of $70,144 is also among the lowest in the country, which reduces the homeownership affordability for locals. Kentucky ranked 41st among 50 states in terms of popularity, based on 71 metrics, including economy, healthcare, education, opportunities, and infrastructure. The state’s rustic landscape, suburban lifestyle, and coal mines might not look appealing to more metropolitan homebuyers. However, Kentucky is ideal for retiring couples looking to move away from big cities. Remote workers and first-time homebuyers looking for affordable cost of living and low crime rates can take advantage of Kentucky’s affordable home prices. For serious homebuyers, having an experienced Realtor can help you find the best deals.

2. Mississippi

Mississippi has the second weakest housing market in 2022, with only 3,372 existing home inventory and 8,191 new constructions. Despite the low housing supply, the state’s median home price is the lowest in the country, with properties selling at a median price of $119,000. While this could be due to the low cost of living, the affordable prices could also suggest slow homebuying activity. The median household income in Mississippi is also the lowest in the country, with an average household earning of $62,835 annually. Moreover, the high mortgage rates of 4.24% can be a setback for homebuyers earning less than the mean income levels. The cold housing market in Mississippi can be attributed to the state’s weak economy. The Magnolia State ranked 49th in the country in terms of economy, scoring low in the business environment, employment, and overall growth. Nevertheless, the state’s affordable homes, suburban lifestyle, low crime rate, and luscious parks and forests attract homebuyers who want to retire from expensive city living. If you’re considering buying a home in Mississippi, hiring a licensed agent will help you navigate the low inventory and high mortgage rates.

3. North Dakota

North Dakota exhibited a weak housing market, with a tight housing inventory of 1,352 and only 3,442 new constructions. Although there’s a shortage in housing supply, homes are selling at a median price of $193,900, which is relatively cheaper compared to other states. This may reflect slow homebuying demand. However, the state posted the lowest mortgage rates at 3.9%. The mean household income of $85,476 is relatively higher than in other states with weaker markets, which improves homeownership affordability among locals. The Peace Garden State has ranked 48th in terms of the business environment, which means slower business activities compared to other states. North Dakota also has the third lowest population in the US. These two indicators have contributed to the cool housing market situation. Middle-class homebuyers who want to relocate to a tax-friendly state despite the cold weather can benefit from North Dakota’s low mortgage rates and affordable housing.

4. Florida

Amid the relatively higher volume of homes available on the market, Florida struggles with housing shortages as the population booms. The Sunshine State boasts a strong inventory of 36,544 and 209,657 new constructions—the second highest across all states. However, since the soaring demand outpaces supply, prices have spiked, with homes selling at a mean price of $215,300. Mortgage rates also continue to surge at 4.43%. The average household income is only $80,286, a setback to homeownership affordability as home prices and interest rates rise. In spite of Florida’s housing deficit, the high number of new developments indicates more investments from construction companies pouring into the state. This is unsurprising, given that Florida has the third biggest population in the country in 2022. Still, the existing inventory is a far outcry from the 21 million people currently living in the state. Home prices will continue to shoot up, though signs of slowing down might be observed in the coming months as homebuyers reconsider purchasing a house. For serious homebuyers who want to lock in current rates, hiring a licensed agent and getting a pre-approved loan can help find valuable investments.

5. West Virginia

West Virginia’s weak housing market is primarily due to low inventory, new constructions, and household income. The number of homes available is 2,182, while new construction is only 3,876. Despite this shortage, houses are selling at a median price of $119,600, the second cheapest across all states. This may indicate slower homebuying activity compared to other states. Household income is also the second-lowest, at $63,680. Mortgage rates of 4.34%, however, are relatively high. While The Mountain State is the 38th most populous state, it experienced a -0.32% population decline in 2021. The state also has the third weakest economy in the country, ranking low in terms of employment, business environment, and overall growth. However, with relatively affordable cost of living, low crime rates, and luscious foliage, retiring individuals and remote workers who want to stay away from costly cities could take advantage of the state’s affordable home prices.

Real Estate Housing Market Statistics 2022

Here’s the overall ranking of all housing markets based on existing inventory, new constructions, household income, mortgage rates, and home sale price by state. Overall Ranking State Median Housing Prices 1 Available Inventory 2 New Construction 3 Household Income 1 Mortgage Rates 4 1 California 2 4 3 5 15 2 Texas 31 3 1 18 45 3 New York 8 1 12 7 15 4 New Jersey 6 7 16 1 26 5 Hawaii 1 38 45 6 47 6 Colorado 4 16 7 12 19 7 Washington 5 24 9 10 7 8 Massachusetts 3 25 29 3 25 9 Georgia 30 5 6 22 41 10 Virginia 12 12 14 8 18 11 Maryland 7 21 28 4 26 12 Pennsylvania 29 8 10 20 20 13 Illinois 25 6 26 14 35 14 Connecticut 11 32 42 2 10 15 Utah 10 34 13 15 10 16 North Carolina 31 10 4 34 36 17 Arizona 19 17 5 26 23 18 Oregon 9 26 24 21 7 19 Minnesota 20 19 15 13 28 20 Nevada 14 27 20 24 1 21 Alaska 13 50 49 11 3 22 Michigan 40 9 21 32 6 23 New Hampshire 16 47 43 9 23 24 Ohio 43 11 17 33 7 25 Delaware 17 45 36 16 20 26 Tennessee 34 13 8 39 46 27 Rhode Island 15 49 50 17 10 28 South Carolina 37 18 11 42 40 29 Wisconsin 28 28 19 27 15 30 Indiana 45 22 18 38 1 31 Missouri 38 14 23 37 37 32 Vermont 18 48 48 25 13 33 Idaho 24 37 25 41 30 34 Maine 27 42 41 36 4 35 Wyoming 22 46 47 23 37 36 Iowa 42 23 33 31 41 37 Louisiana 36 20 27 44 43 38 Alabama 44 15 22 46 47 39 Kansas 41 36 35 30 33 40 Nebraska 39 40 34 29 28 41 Montana 20 41 40 40 44 42 Oklahoma 47 29 31 43 37 43 South Dakota 35 43 39 35 32 44 New Mexico 33 35 38 47 33 45 Arkansas 48 30 32 48 49 46 West Virginia 49 39 44 49 22 47 Florida 23 2 2 28 13 48 North Dakota 26 44 46 19 50 49 Mississippi 50 33 37 50 31 50 Kentucky 46 31 30 45 4

1 Median Housing Prices and Household Income from World Population Review

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Median Housing Prices and Household Income from World Population Review 2 Existing Inventory from FRED

Existing Inventory from FRED 3 New Construction from Census.gov

New Construction from Census.gov 4 Mortgage Rates from Business Insider

How We Evaluated the Strongest & Weakest Housing Markets by State

To see which states have the best real estate markets, we analyzed the mean home price, existing inventory, new constructions, income levels, and mortgage rates per state. These crucial statistics are effective indicators of the health of a housing market. Here are the five data points we considered to determine the strongest and weakest markets in 2022: Housing prices: Housing prices are considered the biggest indicator of overall housing market health because price is the primary criterion for inclusion and exclusion in a property search for buyers. Higher home prices indicate a “hot” market as the homes are in great demand. Housing prices are considered the biggest indicator of overall housing market health because price is the primary criterion for inclusion and exclusion in a property search for buyers. Higher home prices indicate a “hot” market as the homes are in great demand. Available inventory: The available inventory in a given market is key. Lower inventory means less choice for the buyer and, generally, fewer purchases. Higher inventory, when coupled with buyer interest and financial health, creates a strong housing market. The available inventory in a given market is key. Lower inventory means less choice for the buyer and, generally, fewer purchases. Higher inventory, when coupled with buyer interest and financial health, creates a strong housing market. New construction: New construction―for middle-market or starter houses―means community growth. New construction gives buyers with a limited budget more property choices and shows general housing market growth. New construction―for middle-market or starter houses―means community growth. New construction gives buyers with a limited budget more property choices and shows general housing market growth. Household income: Household income is key to homebuying. Lower incomes mean home purchases are less likely, while higher incomes make homebuying eminently possible. Higher incomes, then, indicate a stronger housing market. Household income is key to homebuying. Lower incomes mean home purchases are less likely, while higher incomes make homebuying eminently possible. Higher incomes, then, indicate a stronger housing market. Mortgage rates: High mortgage rates are key to housing market health. While there are many reasons mortgage rates might be high, for the purposes of this study, we considered high rates as an indicator of buyer demand for home loans, indicating a “hot” market. This, however, can be a disincentive to purchase.

Bottom Line

As the economy recovers from COVID, certain housing markets have shown signs of growth and stability. California, Texas, New York, New Jersey, and Hawaii are the top real estate markets in the US in 2022, exhibiting strong inventory and new developments, as well as high home prices and income levels. The five weakest real estate markets are Kentucky, Mississippi, North Dakota, Florida, and West Virginia. These states have very tight inventory and new developments, along with low-income levels and high mortgage rates.

fitsmallbusiness.com - 10 States With the Strongest & Weakest Housing Markets

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