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Ten States with the Strongest Housing Markets

The national housing market is showing steady growth, with 4.54 million homes sold in 2011, and 6.44 millions predicted sales in 2019,. Buyers may be eager to find their next home. However, this trend does not necessarily reflect the state’s housing market health. State economies are constantly in flux. Many suffer from low growth, while others even stagnate.

It is important that homebuyers understand what to expect from the housing markets in the country before they can choose the perfect spot for their dream property. Fit Small Business compiled this ranking based on the most recent data about the average house price, mortgage rates, inventory and household incomes in each state.

These are the five data points that we used to rank the most popular real estate markets for 2019:

  • Housing prices (30%)Housing values are the best indicator of overall market health. Because price is the primary criteria for buyers and sellers when deciding whether to include or exclude them from a property search, they are the most important. A hot market is one with higher home prices, which means that the homes are in high demand.
  • The available inventory (20%) is the key. A lower inventory will mean fewer buyers and more choices. A strong housing market is created when there is more inventory and buyers are interested.
  • New construction (20%)New construction is for middle-market and starter homes. It means community growth. The new construction allows buyers with limited funds to have more options and promotes general growth in the housing market.
  • Household Income (15%):Household Income is crucial to homebuying. Higher incomes allow homebuying to be possible, but home purchases are less likely if you have lower incomes. A stronger housing market is indicated by higher incomes.
  • Mortgage rates (15%) A healthy housing market is dependent on high mortgage rates. There are many reasons why mortgage rates may be high. However, this study considered high rates to be an indicator of buyer demand in a hot market for home loans. However, this can make it difficult to buy.

10 states with the strongest housing market (with the median home price included for reference)

These are the 10 top states with strong housing markets in 2019.

1. California

Tower Bridge, Sacramento, California | Image by Falkenpost from Pixabay

California is a top-ranked state for four data points: income levels, new construction, inventory, houses on the market and mortgage rates. California’s income levels are high at $67,169 per year. Both the new construction rates for California are 62,236 units per year, and the housing inventory rates are 762.952–both highly ranked nationwide. The median home price is $544,000. However, mortgage rates are in the middle at 3.3%.

California’s size and appeal on the coast are two of the reasons California is such a strong place to live. As mentioned above, California’s size makes it possible to have a large inventory while homes on the water attract residents looking for beachfront properties. This is partly why the median home price is so high, and it is supported by the similarly high average salary.

2. Colorado

Denver, Colorado | Image by mrminibike from Pixabay

Colorado is second due to its strong household income, high new construction and existing housing stock, and lower average housing costs. Colorado’s mortgage rates are at 4.28%, which is among the highest in the country. Colorado’s average household income is $65,458 per year. Each year, 29,061 new homes are added to the existing inventory of 139 336 homes. For a single-family home, the average home cost is $419,000

Colorado’s low home prices and high average household income make it a strong market for housing. Add in existing and new construction, the housing inventory means that buyers have many options. These range from starter homes to more luxurious properties. One problem is that Colorado has higher interest rates. This means that buyers could pay more interest over the lifetime of their home loan.

3. Texas

Austin, Texas | Photo by Jeremy Banks on Unsplash

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Texas is the third most strong housing market in Texas due to its high ranking for new construction with 123,249 homes and 867,217 existing stock. The state has one of the highest mortgage rates at 4.36%. However, the median housing cost is only $279,000. At $57,051, the household income is still in the middle of all states.

Texas’s new construction and inventory make it a popular housing market. This creates a wealth for buyers of all budgets. The only problem for Texas buyers is the high mortgage rates. This is due to the low average housing cost and the respectable household income. This is still a great marketing strategy for 2019.

4. Washington

Space Needle in Seattle, Washington | Image by David Mark from Pixabay

Washington’s fourth strongest housing market is due to its inventory of 179.169 houses and their growth of 233.56 new properties every year. This vibrant housing market has a median home price of $395,000, and an average annual income of $66,174. At 4.2%, the mortgage rate ranks among our top ten.

Washington’s strong housing market is due to the large number of homes available for less than $400,000. Both first-time and second-time buyers can choose from a wide range of homes to suit their needs and budget. Washington buyers are the only ones who suffer from the same high mortgage rates as Texas and Colorado.

5. Virginia

Monticello in Charlottesville, Virginia | Image by skeeze from Pixabay

Virginia’s housing marketing combines a high income household of $68,766 and a low average home price of $314,970. Virginia is ranked in the top 15 for new construction, with 213,139 homes being built each year. This adds to the existing inventory of 238,948. The mortgage rate remains high at 4.21%, which is comparable to many of the most popular real estate markets.

Virginia’s housing market is very promising, with a low home price and many properties available for purchase. Buyers can choose houses that fit their budget and qualify for mortgages thanks to a high annual household income. The mortgage rate in this state is the highest, just like other states on the list. Buyers should shop around for the best mortgage rate, or refinance later when rates drop in order to save money.

6. New Jersey

The Boardwalk in Atlantic City, New Jersey | Image by Bruce Emmerling from Pixabay

New Jersey ranks in the second half our list of most hot real estate markets. Their average household income of $76,475, and their home prices of $334,000.00 are both indicators of a strong economy as well as a strong housing market. There are only 397,779 homes currently on the market, and only 10,452 new properties per year, so starter homes may be in short supply. For any housing market, the 4.1% mortgage rate can be high.

Because there are so few starter homes in New Jersey, the housing market is ideal for people looking to buy a property. The median home price is approximately the same as the average household income, which makes mid-priced properties affordable. Although some buyers might be discouraged by the lack of affordable new construction, there is plenty of inventory available that will make New Jersey a great choice for those with higher incomes.

7. New York

Grand Central Station, New York, New York | Photo by Robert Bye on Unsplash

New York’s housing market boasts 352,514 existing homes and an average annual income $62,765. However, new construction is slow with only 10,622 units being added to the market in this year. With a mortgage rate of 4.15%, the average home is worth $385,000, making it one of the most expensive in the country.

New York is similar in New Jersey, with slightly higher housing prices and a lower household income. However, the large inventory of preexisting properties creates a strong market that gives buyers an edge over sellers who are trying to sell their property. This could help first-time buyers to enter the market by allowing them negotiate a price that suits their budget.

8. Florida

Miami, Florida | Image by yanivmatza from Pixabay

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Florida has a vibrant housing market. There was an increase of 94.836 new homes last year. This added to the 871.758 existing houses. The state’s median home price of $294,000.00 makes homebuying an attractive option. At 4.22%, the mortgage rate is high.

Florida is one of the most desirable real estate markets due to its increased construction and increasing availability of houses. Additionally, Florida is a desirable location for properties near water and home prices are very affordable.

9. Maryland

Baltimore, Maryland | Image by Bruce Emmerling from Pixabay

Maryland residents have a lot of buying power. The high household income of $78,916, which is the highest in the country, easily offsets the moderate housing costs at $325,000. The robust inventory of houses available for sale is 147,556, not counting the 12,797 new units that were added last year. However, the mortgage rate is at a negative 4.09%.

Maryland is one the smallest states by land area, so there is limited potential for new construction. Other factors, such as annual income and housing costs, show that houses can be bought by ready buyers. Maryland is one of the most desirable real estate markets in 2019. It has the highest income and the best pre-existing inventory. However, Maryland’s mortgage rates will be more expensive than other states.

10. Utah

Monument Valley, Utah | Image by Brigitte Werner from Pixabay

Utah will soon be one of the top real estate markets because of its average household income of $65,325 and moderate housing prices of $350,000. The number of new constructions is high at 18,851, which adds to the 105 289 houses already on the market. Utah is ranked 10th on our list with a 4.1% interest rate, which is in line with other thriving states on our list.

Utah real estate is flourishing due to the new construction and decent pre-existing properties. Buyers have a wide range of options and can choose the right house to suit their budget. Buyers with higher incomes are more likely than others to be eligible for mortgages and to be ready to purchase a home, even at a higher interest rate.

Ranking of All 50 States

 

Overall Ranking State Housing Prices Mortgage Rates Inventory New Construction Household Income
1 California 3 22 3 3 9
2 Colorado 5 9 21 8 12
3 Texas 23 2 2 1 21
4 Washington 6 15 17 10 10
5 Virginia 14 14 13 11 8
6 New Jersey 10 23 5 26 2
7 New York 7 20 6 24 15
8 Florida 19 13 1 2 38
9 Maryland 12 24 19 21 1
10 Utah 9 23 28 12 13
11 Arizona 22 11 11 6 30
12 Massachusetts 4 26 24 33 5
13 Georgia 26 15 8 5 32
14 Minnesota 24 14 20 18 11
North Carolina 25 17 9 4 40
16 Oregon 8 18 25 27 26
17 Illinois 31 11 4 28 17
18 Connecticut 11 27 18 41 6
19 Tennessee 30 3 12 9 43
20 Nevada 15 22 22 20 28
21 Hawaii 1 24 39 42 4
22 South Carolina 28 12 16 7 42
23 Pennsylvania 35 22 14 13 22
24 Michigan 41 16 10 16 33
Wisconsin 36 21 15 23 23
26 Ohio 47 10 7 15 34
27 New Hampshire 18 25 33 43 7
28 Idaho 17 24 35 22 37
29 Delaware 21 16 42 35 14
30 Louisiana 37 4 29 17 45
31 Alaska 20 19 47 48 3
32 Maine 29 7 31 39 31
33 Montana 13 4 47 44 39
34 Indiana 42 13 32 14 35
35 Alabama 39 9 27 19 47
36 Rhode Island 16 28 38 50 18
37 Missouri 45 5 26 25 36
38 Wyoming 27 4 47 47 19
39 Vermont 26 17 37 49 20
40 Oklahoma 43 8 23 29 41
41 District of Columbia 2 23 44 51 51
42 North Dakota 32 6 47 46 16
43 Nebraska 38 8 41 37 24
44 New Mexico 34 9 36 38 44
45 Kentucky 42 10 30 30 46
46 South Dakota 33 9 47 40 29
47 Iowa 44 17 40 31 25
48 Kansas 40 13 45 36 27
49 Arkansas 46 6 34 32 49
50 Mississippi 45 6 46 34 50
51 West Virginia 48 1 43 45 48

Click here To view all data in our study, click here

 

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Methodology

We considered five data points in order to rank the 10 strongest states for housing market strength. These data points were weighted according to their impact or influence on housing markets. These data points are:

Housing prices: 30%

Because it is the main filter that buyers use to find a property, the housing price was given the highest weight. The average home price is too high. Buyers will look for smaller properties or wait until the housing market drops.

Available Inventory: 20%

The number of houses that are likely to be sold is an important indicator of the availability of inventory. Sellers often have a greater advantage than buyers when there are fewer properties on the market. This can lead to higher property prices. Buyers have more choice in areas with a high number of houses, and the prices will be less competitive.

New Construction: 20%

Starter houses or new constructions are an important part of the equation as they tend to be the first-time buyers and low-income buyers. People who are unable to buy a home due to a lack of inventory or high property costs will rent instead.

Household income: 15%

The income of a household determines whether a buyer is able to afford a house in a particular market. People who cannot afford to purchase a home in an area due to rising housing costs will often rent. The result is that renters flood the housing market with unaffordable inventory, leaving homes without buyers. This causes a weak housing market.

Rates for Mortgages: 15%

The health of the housing market is determined by mortgage rates. Lenders are trying to stimulate the housing market by offering low rates to entice buyers to finance a house purchase. Although higher rates are more expensive for the buyer they indicate that there are many homebuyers who are competing for home loans.

Bottom line: 2019 is the strongest year for housing in each state

We found that the most important factors influencing a market’s health were property prices, availability of inventory, household income, mortgage rates, and household income in those states that ranked among the top 10. Markets rise when income is high and housing costs are low. While high mortgage rates can sometimes be a disincentive to buy, they generally indicate competition for home loans, and a strong market.


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