America’s 13 Hottest Housing Markets in 2018

The outlook for America’s housing market in 2018 and beyond is decidedly positive. Market activity is starting to pick up due to a number of factors, including lower unemployment rates, rising household incomes and restored buyer confidence in many of America’s housing markets.

All of this is excellent news for new construction, which is expected to recover this year and maintain its hold in the marketplace. As housing prices continue to climb, new construction will be necessary to provide much-needed supply in some of the nation’s increasingly desirable locations.

Housing Market Trends for 2018

The overall outlook moving forward into 2018 is optimistic when it comes to the housing market. With high demand for housing and a shortage of homes, house prices are on the rise. According to Reuters, U.S. house prices are expected to grow 5.6 percent this year and 4.3 percent in 2019.

Of course, some locations are hotter than others. The current trends that are influencing these markets the most include an increase in active millennial first-time homebuyers, as well as confident sellers ready to pull the trigger on listing their homes.

By keeping an eye on trends, home builders can make informed decisions about where to build for the biggest and quickest profit. Currently, residential builders and remodelers should consider appealing to millennials.

Young buyers are particularly interested in modern energy-efficient and low-maintenance homes with open floor plans. In fact, an easy-to-care-for home is so important to young homebuyers, that almost half of millennial homebuyers would rather buy a brand new home to avoid maintenance issues.

Millennials also want homes that are designed to suit their pets. A 2017 Suntrust Banks survey found that 33 percent of millennials who purchased their first home did so with a desire to accommodate their pet dog, ranking higher than marriage and children as home-buying motivators. Home builders could benefit from building dog-friendly homes in cities that welcome dog lovers, and millennials, with open arms.

What Makes a Housing Market Hot?

Many factors can help determine and project activity in the housing market. Experts can anticipate the actions of a housing market nationwide, but try not to put too much stock in it, as trends can differ within each market. A lot of it comes down to location and the lifestyles cities can provide for workers and families.

Many of the new, hot housing markets have a more affordable cost of living, too, which helps spur economic activity and development for businesses and startups that can operate from anywhere. America’s hottest housing markets are also experiencing falling unemployment rates and stronger economies after nearly a decade — or more, in some locations — of stagnant housing activity.

Hottest Housing Markets in 2018

All over the country, home builders are enjoying an increase in home sales. According to a recent U.S. Census Bureau report, the sale of new single-family homes increased 14.1 percent since May of 2017. Nationally, new homes sell for an average of $313,000 as of May 2018.

Some of the booming locations include well-known hot housing markets like Denver, Seattle and Dallas-Fort Worth. However, the list also includes some surprising markets like Boise, St. Louis and Memphis.

Each market has its own set of factors that pushed it to become one of this year’s hottest destinations. Factors like lifestyle, demographics and income level all add to the value of a housing market. Economic and investment opportunities, as well as overall housing inventory levels, play a key part in how a market will fare.

Here we have 13 of the hottest housing markets for 2018, as determined by many expert sources, including Realtor.com, Trulia and Zillow. Experts look at several metrics, including current inventory, median days on the market, sales prices and sales volumes. In determining what makes a market hot, experts also examine local economic indicators like income levels, population growth and unemployment numbers.

Though this is not an exhaustive list, we’ve outlined some pretty compelling arguments for each of America’s hottest markets in 2018.

1. Austin, Texas

Austin is not only the capital of Texas, but is also considered the “live music capital of the world.” People all around the country are flocking to Austin to enjoy an abundance of job opportunities, a vibrant arts and culture scene, and warm weather year-round.

The population in Austin is booming. In 2000, the population was 656,562 and had skyrocketed to 963,116 by 2018. A low unemployment rate of 2.8 percent draws newcomers looking for job opportunities in a fun town. All of this has made Austin a hot market for real estate agents and builders.

Austin Current Housing Activity

In Austin, home prices are rising, and houses are spending less time sitting on the market with record-breaking numbers. The Austin-Round Rock housing market experienced a 10.5 percent increase in sales compared to 2017. In the metro area, prices for a single-family home rose 3.5 percent to $305,233. Homes between $150,000 to $200,000 spent less than 50 days on the market.

Austin is also a home builder’s dream as it is currently one of the biggest home-building markets in the country. According to Trulia, Austin built more homes than their historical average in 2017, having approved 107 percent more construction permits than in past years. New homes currently range in price from $183,600 to $1,064,990 according to a Realtor.com search. Strong job growth and increased home prices are good indicators that Austin is an excellent city for building.

2. Raleigh, North Carolina

Raleigh is another capital city on this list with a hot housing market. Raleigh is attracting young, educated residents with steady job growth and affordable living. Raleigh is known for opportunities in the research and technology fields, and offers the beauty of a southern coastal state.

Raleigh residents enjoy plenty of green space, family-friendly museums and a plethora of dining and microbrewery options. The cost of living in Raleigh is also slightly lower than the U.S average — another reason people are heading to this alluring city.

In 2016, Raleigh was ranked as the 14th fastest-growing metro area in the U.S. The population of Raleigh grew an estimated 15 percent from 2010 to 2017, with an estimated population of 464,758. For those with a strong tech background and a fondness for mild winters, Raleigh is an enticing option.

Raleigh Current Housing Activity

The outlook for Raleigh’s housing market is bright. Home prices have increased 5.9 percent, and experts predict prices will continue to rise 4.2 percent within the next year. The cost of a new home in Raleigh currently ranges from $200,000 to $979,900.

Raleigh is so hot right now that Zillow ranked this southern city number two for the top housing markets in 2018.

3. St. Louis, Missouri

St. Louis is another market making a significant recovery after a fairly inactive past decade. Household incomes and job rates are both growing, much of which is attributed to a strong Generation X and Generation Y population ready to dive into homeownership.

The city is also better positioning itself as a great place to live and work. St. Louis residents love the urban feel while enjoying a cost of living that’s six percent lower than the national average.

St. Louis Current Housing Activity

Properties in St. Louis are spending less time on the market, and overall rates of home sales are continuing to grow. New home prices range from $169,900 to $842,700, giving contractors incentive to build. Prices are predicted to rise 3.8 percent within the next year.

With singles and families looking to make their first home purchase, the single-family home market continues to outpace last year’s performance. St. Louis also continues to be a hit with Generation X buyers who are looking at re-entering the market at an affordable price.

4. Atlanta, Georgia

Atlanta’s housing market is making a strong recovery after the financial collapse damaged its local economy. The city is now seen as a trendy place to live and is especially popular with millennials.

Atlanta offers a vibrant nightlife, lots of character and a relatively affordable cost of living. For these reasons, many young professionals are choosing to live and work in the Atlanta region. Many millennials are heading to Atlanta suburbs like Duluth and Roswell to enjoy bigger yards, safer neighborhoods and new homes with modern energy-efficient features.

Atlanta Current Housing Activity

According to Realtor.com, new homes in Atlanta range from $183,400 on the low end to $1,046,439 on the high end. Prices are expected to continue rising, yet buyers aren’t hesitating to move on purchases and make A-Town their new home.

5. Nashville, Tennessee

Nashville is currently one of the fastest-growing cities in the country with an average of 100 people per day moving there. Nashville, the capital of Tennessee, seems to have it all. The Music City attracts musicians who want to become the next big country star, it has hundreds of innovative restaurants to please foodies and an arts scene to rival the largest metropolis.

Also, residents enjoy living in an income-tax-free state where there’s a low unemployment rate of 3.0 percent. Compared to other cities, Nashville is an affordable and highly desirable location. Nashville ranked as the eleventh best place to live according to U.S. News.

Nashville Current Housing Activity

With so many people packing their bags and heading to Nashville, it’s no wonder the housing market is on fire. Zillow ranked Nashville as the 8th hottest housing market in 2018. According to Trulia, Nashville saw a 65.8 percent increase in permit activity compared to past trends.

Currently, new homes in the Nashville area range from $112,434 to $1,030,000. Overall, Nashville has a healthy housing market that is not going to decline anytime soon.

6. Memphis, Tennessee

Like many cities, Memphis has been modestly but steadily recovering from the financial crisis for the past few years. The Memphis housing market, in particular, is expected to grow. Although not as hot as Nashville, Memphis has a promising future for those looking to build homes as new home prices have skyrocketed from a low $187,788 in 2016 to a high $446,109 in 2017. The construction sector grew over four percent.

Many factors make Memphis so appealing. The city has a low cost of living, making it extremely attractive for families. Housing prices, while rising, remain well below what you would find in other sizable markets.

Memphis Current Housing Activity

New homes currently range from $196,900 to $908,900 in the Memphis metropolitan area. In general, prices have gone up 9.7 percent over the past year and are expected to rise another 4.0 percent.

7. Charlotte, North Carolina

Charlotte is in the midst of a housing boom and has seen steady increases in sale prices over the past five years. Home value is expected to rise as the result of a growing population and robust economy.

Offering a mix of southern charm and modern amenities, Charlotte is an affordable and appealing place to live and is attracting many newcomers. In fact, Charlotte has had a growing tech start-up scene that has made the area very popular with millennials.

Charlotte Current Housing Activity

High demand and low supply is the current storyline in Charlotte’s housing market. Zillow ranked Charlotte as the 4th hottest housing market for 2018. According to Realtor.com, new home prices range from $175,900 to $1,131,327.

8. Columbus, Ohio

Many people think of Ohio State football games when they think of Columbus, Ohio. However, as the capital of Ohio, there is plenty more to Columbus than college football.

Columbus is home to many large companies and a diverse economy, with a stable unemployment rate of under four percent. Millennials are flocking to Columbus for job opportunities, and staying in the city to enjoy a low cost of living, a fun nightlife, friendly neighbors and an active arts and culture scene.

Columbus Current Housing Activity

The current housing market is hot, and it is not predicted to grow cold any time soon as home values are expected to rise another 5.8 percent. New home prices range from $132,150 to $999,000 in Columbus and the surrounding areas, making Columbus an attractive option for home builders.

9. Boston, Massachusetts

The outlook in Boston’s housing market is very positive. As a desirable market, Boston home prices continue to rise in response to growing demand.

The cost of living in Boston is much higher than in some of the other hot housing markets on this list. People may be more hesitant to relocate to Boston, but many are still venturing to the city nonetheless. The construction sector continues to respond by building multi-family units to provide a much-needed housing supply to the city’s working millennial population.

Boston Current Housing Activity

The housing market in Boston has a sunny future, despite a higher cost of living. People love Boston’s rich history, fascinating culture and strong education presence. Currently, the median home value in Boston is $585,100, and prices have risen 8.3 percent over the past year. Home prices are predicted to increase by 7.7 percent.

Boston is seeing healthy growth in new home construction as well. According to Trulia, Boston saw a 61.0 percent increase in building permit activity in 2017 compared to the historical norm. A new home within 20 miles of Boston ranges from $335,120 to $1,055,000.

10. Seattle, Washington

As another desirable location for quality of life, Seattle’s housing market has strengthened due to high demand. As a renowned center for tech businesses, Seattle is experiencing strong growth in housing prices, sales and overall market activity.

Part of this can be attributed to the coveted lifestyle of the Pacific Northwest. Much of it has to do with Seattle’s strong economic growth, including the well-known technology sector led by employment giants like Amazon and Microsoft.

Seattle Current Housing Activity

Seattle’s home prices have increased 13.2 percent over the past year are expected to rise another 6.8 percent. New homes in the city range from $547,990 to $1,349,995.

Despite rising home costs and a higher-than-average cost of living, homes are flying off the market in Seattle, making this city by the sea a great location for home builders. Seattle ranked number three on Zillow’s hot market list.

11. Boise, Idaho

The law of supply and demand is in full swing in Boise, Idaho. The city has been benefiting from a stabilizing economy. Unemployment rates are down, the population is growing and the values of homes are rising. In May of 2018, the unemployment rate in Boise was a low 2.6 percent.

With all this positive activity, Boise is becoming recognized as a great place to build a home. People of all ages enjoy the lifestyle that Boise has to offer. The city offers both a modern metro feel and plenty of outdoor recreation, appealing to individuals and families who want the best of both worlds. A high quality of life, along with the city’s low cost of living, is putting Boise on the map.

Boise Current Housing Activity

Boise home prices are projected to increase 10.6 percent over the next year. Within 20 miles of the city, new homes currently range from $276,990 to $331,990. Now is the right time to build in Boise as the population continues to grow and home buyers search for new, modern homes.

12. Richmond, Virginia

Richmond has all the makings of a boom town. A variety of sectors sustain its economy, including government, education, manufacturing and finance. This has led to low unemployment rates and growing household income levels in Richmond.

Richmond has a desirable lifestyle with popular neighborhoods that are driving up the demand for housing in the area. Plus, it has a relatively low cost of living, which is attractive for families and all generations.

Richmond Current Housing Activity

Richmond’s hot seller’s market is driving up the median sale price of homes so far this year. New homes currently range from $179,990 to $444,485.

13. Dallas-Fort Worth, Texas

According to a U.S. Census Bureau news release, the Dallas-Fort Worth-Arlington metro experienced the largest population growth in the country in 2017. The area gained 146,000 new residents between 2016 and 2017.

The housing market will continue to boom due to high demand and consistently low inventory levels. In fact, this type of growth is expected to continue statewide, with many cities in Texas going through a substantial growth period.

Dallas-Fort Worth is a desirable lifestyle location for the metropolitan feel. It’s home to numerous sports teams and recreational activities. Dallas-Fort Worth also has a healthy job market, like Denver and Seattle. The location is increasingly desirable for millennials and people of all generations. Much of the labor growth has to do with the area’s continued strength in the construction industry.

Dallas-Fort Worth Current Housing Activity

Dallas-Fort Worth is expected to remain a very hot market into 2019 and home prices have increased 13.9 percent over the past year. Currently, new homes in Dallas range from $345,000 to $569,900, though prices are expected to increase. Dallas saw a 61.0 percent increase in permit activity in 2017 as home builders jumped at the chance to keep up with a rapidly growing population.

The Outlook for Residential Builders in 2018

With many cities making strong housing market recoveries, builders can alleviate some of the supply pressures many of these markets are feeling. Densifying suburbs will be an important factor in providing the lifestyle buyers expect at prices they can afford. As the need for new housing inventory increases, so too will the need for structural warranties for builders in these markets.

If you’re a home builder, remodeler or real estate agent looking for home warranties to ease your customers’ minds, American eBuilder is here to help. At American eBuilder, we provide quick, affordable home warranties you and your clients can trust.

Boost your reputation and the value of a new home with an American eBuilder warranty. To learn more about warranting your building in a hot market or obtaining a warranty to win clients and protect your name, contact us today!