Texas Dominates Top U.S. Housing Markets: Study

To rank local real estate markets, WalletHub measured housing-market attractiveness and economic strength.

With mortgage rates and home prices still way above pre-pandemic levels, despite moderating in recent months, prospective home buyers are having trouble finding a decent deal.

So how might you go about looking for your piece of the American Dream?

“If you aim for long-term growth, equity and profit with your housing purchase, you’ll need to look beyond tangible factors like square footage and style,” according to a study by personal finance web site WalletHub.

“Those factors certainly drive up property values. From an investor’s standpoint, though, they hold less significance than historical market trends and the economic health of residents.”

To determine the best local real-estate markets in the U.S., WalletHub compared 300 cities of varying sizes using 17 indicators of housing-market attractiveness and economic strength.

That includes home value forecasts, share of underweight mortgages, vacancy rates, housing affordability, credit scores and unemployment rates.


Top Five, Bottom Five

The top five cities are:

1. Frisco, Texas;

2. Allen, Texas;

3. McKinney, Texas:

4. Austin, Texas;

5. Nashville, Tenn.

Texas cities benefit from the booming economy in the state, which is benefiting from the energy industry’s surge and the lack of a state income tax.

The bottom five cities are:

296. Hartford, Conn.;

297. St. Louis;

298. Shreveport, La.;

299. Bridgeport, Conn.;

300. Peoria, Ill.

Experts’ Take

The report includes commentary from several housing experts.

Eva Steiner, professor of real estate, Pennsylvania State University

“My advice is not to rush into any purchase decisions just because there is a risk that prices may rise further,” she said. “The most important factor to consider is the long-term affordability of the purchase.”

Andrea Lee Negroni, adjunct law professor, American University

“Hopefully, the volatility [in the housing market caused by covid] will even out, but covid may continue to affect housing,” she said.

“As supply chains recover …, building activity should resume, making more homes available for purchase and leveling prices.”

Nicholas Stolatis, principal of EPN Real Estate Services

“If one has the financial resources available, this would be a good time to seek out specific deals from current owners who may be struggling with the increased interest rate environment,” he said.

Thomas Nesslein, business school professor, University of Wisconsin-Green Bay

He notes several oft-neglected factors that homebuyers should consider. “Owners must pay in addition to the loan payment expenses such as property taxes, maintenance costs, and depreciation,” he said. And they could lose the potential return on their down payment.

Frank Braconi, professor at New York University’s Schack Real Estate Institute

“You will probably see home price growth flatten in some of the Northern markets like New York City, Boston, Washington, and Chicago, with prices possibly falling in the sunbelt markets that have shown price volatility in the past, like Phoenix, Dallas, Tampa, and Miami.”

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