Housing Is Cooling Nationally. In These Affordable Markets, Buyers Are Still Competing.

Share this article!

The national housing market may be losing momentum, but buyers aren’t disappearing everywhere.

They are concentrating.

New Realtor.com Economic Research released Tuesday shows that the country’s most competitive housing markets remain clustered almost entirely in the Midwest and Northeast, where comparatively affordable home prices are drawing buyers even as higher mortgage rates weigh on demand nationally.

Rockford, Illinois, ranked as the hottest housing market in the country in August, followed by Kenosha, Wisconsin; Erie, Pennsylvania; Hartford, Connecticut; and Wausau, Wisconsin.

Not a single Southern or Western market made Realtor.com’s top 20.

The geographic divide matters because the broader housing market is moving in almost the opposite direction.

Nationally, the median home listing price fell 1.3% from a year earlier in August, pending listings declined year over year for the first time since November, and 20.4% of active listings had undergone a price reduction, according to Realt.com’s August housing report.

Yet homes in the 20 hottest markets spent a median of only 35 days for sale—more than three weeks faster than the 60-day national median—and listings attracted 2.6 times as many views per property as the national average.

Housing demand hasn’t simply weakened.

It has become increasingly selective.

“Housing demand hasn’t simply weakened. It has become increasingly selective.”

Rockford’s $270,000 price point is difficult to ignore

Rockford’s rise to No. 1 illustrates the economics driving the shift.

The Illinois metro had a median listing price of approximately $270,000 in August, according to Realtor.com.

That’s roughly $155,000 below the national median listing price of $424,500.

It is also considerably cheaper than two larger nearby markets. Realtor.com put Chicago’s median listing price at approximately $395,000 and Madison, Wisconsin’s at approximately $471,000.

Rockford listings attracted 2.9 times the national average number of views per property in August and spent a median of 33 days on the market.

That was about half the 60-day national median.

Rockford has appeared among Realtor.com’s 20 hottest markets 41 times, but August marked only the second time it has held the No. 1 position. The previous occasion was December 2024.

Its performance suggests that buyers facing today’s affordability constraints aren’t necessarily abandoning homeownership.

Some are changing where they look for it.

The Midwest offers a different housing equation

Nine of the top 20 markets in Realtor.com’s August ranking were in the Midwest.

In addition to Rockford and Kenosha, the list included Wausau, Racine and Oshkosh-Neenah in Wisconsin; Peoria, Illinois; Monroe, Michigan; and Akron and Canton-Massillon in Ohio.

The median listing price across those Midwest markets was approximately $306,500, according to Realtor.com.

That puts the typical listing in the group more than $100,000 below the August national median.

Peoria was the least expensive market in the entire top 20, with a median listing price of $185,000.

Akron was at $243,000. Canton-Massillon was $266,000. Rockford was approximately $270,000.

Those numbers are especially significant in a market where financing costs remain a major constraint.

Realt.com’s August national housing report calculated that the average monthly mortgage rate rose for six consecutive months, from 6.05% in February to 6.67% in August.

When borrowing becomes more expensive, purchase price becomes increasingly important to the monthly-payment calculation.

A buyer may not be able to control mortgage rates.

That buyer can control how much house he or she attempts to finance.

The Northeast remains fiercely competitive

Affordability doesn’t tell the entire story.

Eleven of August’s top 20 markets were in the Northeast, including Erie, Pennsylvania; Hartford, Connecticut; Rochester, New York; Lancaster, Pennsylvania; Norwich-New London, Connecticut; Reading, Pennsylvania; Binghamton, New York; Springfield, Massachusetts; Concord, New Hampshire; Waterbury-Shelton, Connecticut; and York-Hanover, Pennsylvania.

Some are substantially more expensive than the Midwest markets.

Hartford carried a median listing price of approximately $460,000. Norwich-New London was about $464,000, while Concord reached $575,000.

Yet demand remained intense.

Hartford listings generated 4.3 times the national average number of views per property—the highest level among the top 20—and homes spent a median 36 days on the market.

Lancaster homes spent just 26 days on the market, the fastest pace among the top-ranked metros.

That suggests the hot-market story cannot be reduced to buyers simply chasing the country’s cheapest houses.

Relative affordability, proximity to employment centers, existing supply and local demand all matter.

But there is a common thread: the country’s hottest markets are overwhelmingly outside the high-cost Western metros and many of the Sun Belt markets that dominated housing discussions earlier in the decade.

More inventory hasn’t eliminated competition

There’s another interesting tension in the numbers.

Housing inventory is growing particularly quickly in the same two regions producing the country’s hottest markets.

Active listings increased 10.5% from a year earlier across the Midwest in August and 9.1% in the Northeast, according to Realtor.com’s monthly housing data.

Those were the strongest regional inventory gains in the country.

The South increased just 1.1%, while the West rose 3.2%.

Normally, a meaningful increase in available homes should give buyers more choices and reduce some competitive pressure.

But inventory levels in the Midwest and Northeast remain far below their pre-pandemic norms.

Realt.com estimates Midwest inventory was still 33% below typical pre-pandemic levels in August.

The Northeast was approximately 46.5% below.

That’s an important distinction.

Inventory can be improving compared with last year while remaining structurally constrained compared with the market buyers experienced before the pandemic.

Both things can be true at once.

This isn’t another nationwide housing boom

The hot-market ranking also needs to be interpreted carefully.

Realtor.com’s methodology measures demand using unique listing views on its platform and market pace using the number of days a listing remains active.

It does not measure completed home sales, bidding wars or home-price appreciation directly.

A market ranking highly therefore means its listings are receiving unusually strong online attention and moving quickly relative to other markets.

It does not mean every seller is receiving multiple offers or that prices will necessarily rise.

There are signs of cooling even inside some of these markets.

Rockford’s median time on market, for example, was four days slower than a year earlier despite its No. 1 ranking.

Springfield, Massachusetts, ranked 17th but homes there spent 10 more days on the market than a year ago.

And several Midwest markets fell considerably in the rankings from last August.

Wausau dropped 19 positions year over year, while Peoria and Monroe each fell 18.

The rankings therefore show where demand is strongest relative to the rest of the country, not that these markets are immune to the forces slowing housing nationally.

The national market is giving buyers more leverage

Across the country, conditions look considerably less competitive.

The national median listing price fell to $424,500 in August, marking the 10th consecutive month of year-over-year declines, according to Realt.com’s monthly report.

Active inventory increased 3.6% from a year earlier to approximately 1.14 million listings.

One in five active listings had received a price reduction.

Listings in pending status declined 0.2% from a year earlier, snapping an eight-month stretch of annual gains.

New contract signings fell 3.4%.

Those aren’t the numbers of a housing market accelerating broadly.

They make the continued competition in markets such as Rockford, Kenosha, Erie and Hartford more noteworthy.

Affordability is becoming a competitive advantage for markets

For years, housing affordability has primarily been discussed as a problem for consumers.

It is increasingly becoming a competitive advantage for cities.

A metro where homes remain within reach of middle-income buyers can attract demand that more expensive markets cannot accommodate.

That doesn’t mean millions of Americans will suddenly relocate to Rockford or Peoria.

Jobs, family, schools, taxes, commuting patterns and lifestyle considerations still influence where people buy homes.

But when the difference between two markets can amount to $100,000, $200,000 or more in purchase price, geography becomes one of the few remaining levers buyers can pull to change the affordability equation materially.

That creates consequences for real estate professionals as well.

Agents in affordable secondary markets may increasingly compete for buyers coming from outside their traditional service areas.

Lenders serving those markets may encounter borrowers whose incomes or employment remain tied to larger neighboring employment centers.

Builders have another signal about where attainable housing can attract demand.

And policymakers in these markets face the challenge of allowing enough housing production to accommodate that demand without eroding the affordability advantage that attracted buyers in the first place.

The August numbers don’t show a healthy housing market everywhere.

They show something more complicated.

The country still has buyers.

But at today’s prices and borrowing costs, those buyers are becoming much more particular about where the numbers work.