To say that the U.S. housing market is hot right now would be an understatement. Two years into the pandemic, bidding wars and properties selling sight unseen are still common across much of the country. However, there are still some local housing markets that provide a high standard of living without breaking the bank.
In the National Association of REALTORS®’ (NAR) 2022 Housing Market Hidden Gems report, the association identifies the top 10 U.S. housing markets with notable underlying housing market fundamentals, such as strong wage and job growth, but where home prices are generally considered undervalued for 2022.
NAR looked at nearly every metro area in the U.S. (379 different markets) and considered an area for their list if its median home price to median family income ratio was at the lower end of the spectrum.
In addition to strong wage and job growth, NAR considered these five indicators that drive housing demand and supply:
- 3-year population growth (U.S. Census Bureau, 2017 - 2020)
- Net domestic migration as a percent of population (U.S. Census Bureau, 2020)
- Percent of population 25 to 44 years old (U.S. Census Bureau American Community Survey, 2019)
- Percent of household with broadband service (U.S. Census Bureau American Community Survey, 2019)
- Ratio of the 3-year change in population (2020 vs. 2017) to the sum of housing permits over a 3-year period (2018 - 2020)
With all these factors considered, NAR predicts that these hidden gem markets (in alphabetical order) will experience strong price appreciation in the year ahead:
- Dallas-Fort Worth, Texas
- Daphne-Fairhope-Farley, Alabama
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Huntsville, Alabama
- Knoxville, Tennessee
- Palm Bay-Melbourne-Titusville, Florida
- Pensacola-Ferry Pass-Brent, Florida
- San Antonio-New Braunfels, Texas
- Spartanburg, South Carolina
- Tucson, Arizona
Here is a graphic, created by NAR, that illustrates where in the U.S. these 10 markets can be found—interestingly, all of which are located in the Sun Belt:
To view NAR’s full report and for a full breakdown of their methodology, click here.