• US home sales remained low due to high mortgage rates and home prices in 2024.
• Southeast cities like Charlotte and Knoxville saw high demand despite affordability issues.
• Analysts predict a potential rise in home sales in 2025, driven by lower mortgage rates.

Another tough year in the US housing market was anything but boring for those in popular cities.

Home sales were soft for a third straight year, the National Association of Realtors recently noted. Mortgage rates and home prices are down from peak levels, but affordability remains a major issue and has sidelined millions of would-be buyers, who are instead renting.

But sellers in hot markets still won big as buyers battled for scarce spots in coveted cities.

10 places movers flocked to in 2024

To determine this year's most popular US real-estate markets, Business Insider compiled and analyzed data from six sources about moving patterns, rents, rental market competitiveness, search interest from homebuyers, and home price growth history and projections.

Although there were some mixed signals, there were also some clear conclusions about which regions, states, and cities drew the most interest from buyers and renters.

A brief look at migration data from Atlas Van Lines may yield more questions than answers. The moving firm found that the places with the most inbound movers relative to those leaving were Arkansas; Rhode Island; North Carolina; Washington, DC; and Idaho. Also on the list of states with inbound rates of at least 55% are Maine, Connecticut, Washington, Alaska, Alabama, and New Mexico, which essentially covers all four corners of the US.

But while that moving data gives a solid big-picture overview, it doesn't provide insight into which individual markets were most popular. That was instead determined by other measures of demand, like how much prices for homes and apartments rose, or how tough they were to land.

This process was more of an art than a science, but the 10 cities that best fit those criteria within states with substantial positive inflows of movers were all east of the Mississippi River. Even more notable is that the Southeast region was home to eight of those 10 popular markets, which were spread across just three states: North Carolina, Kentucky, and Tennessee.

North Carolina was tied for second in the nation in mover inbound rate at 63%, due in part to four especially hot markets. Winston-Salem and nearby Greensboro saw their rents rise 6.7% and 5.3% this year, respectively, giving their rental market competitiveness scores a big boost. Meanwhile, two other major cities in the Tar Heel State — Charlotte and Durham — saw rents decline but were among the 20 most searched markets by homebuyers.

Those four North Carolina cities are set for high-single-digit or low-double-digit home price growth next year, per Realtor.com, and the NAR highlighted Charlotte as a top spot in 2025.

Neighboring Tennessee also had one of the nation's highest inbound rates at 62%. Knoxville was one of the more competitive smaller markets despite rent growth of just 1.5%, and it ranked 10th in the nation in homebuyers' searches. It's also on the NAR's list of standout markets next year. Meanwhile, Memphis saw 22.7% rent growth and is in line for 10.5% home price growth.

Kentucky's inbound rate of 56% was more modest. However, it had Lexington with 9.9% rent growth, a lofty rental market competitiveness score, and the eighth spot in buyers' searches, as well as Louisville, which Rent Cafe said was the top trending rental market of 2024.

Jonathan Miller, the cofounder of the real-estate firm Miller Samuel, told Business Insider that the Southeast market is popular because it's relatively warm and has ample housing inventory.

"It's a combination of the weather and housing affordability," Miller said in a recent interview.

The nation's capital represented the bordering Mid-Atlantic with a 63% mover inbound rate and a fifth-place ranking in homebuyers' searches, pushing prices up 10.2%. Washington, DC, was also one of the 30 most competitive rental markets, though supply kept price growth in check.

Rounding out the list was New Haven, Connecticut, which was arguably the hottest market. It was the fourth most competitive rental market this year, and its rent growth was easily the highest in the US in December at 35.7%. It also had 18.3% home price growth in November and is set for another 9.7% next year due to its Yale University ties and proximity to New York City.

What to expect in 2025

The US housing market has slowly thawed after it froze over as mortgage rates spiked. Some real-estate analysts expect sales to heat up in 2025, though others are more skeptical.

Optimists are calling for the biggest jump since the pandemic boom. The National Association of Realtors sees home sales rising 7% to 12% in 2025, including an 11% jump for new units, while eXp Realty's CEO is calling for 10% growth caused by sliding mortgage rates and rising supply.

But Realtor.com's sales forecast is more tempered at 1.5%, as is Miller's call for a 3% increase. The veteran real-estate analyst said mortgage rates will likely stay above 6%, weighing on demand, plus supply is also limited. Even still, he's expecting a 4% to 5% jump in home prices.

"If mortgage rates unexpectedly fall below 6%, we can have a housing boom," Miller said. "It just doesn't appear that that's in the cards, but there's a lot of upside potential in transaction volume, despite higher mortgage rates."

Miller said that against that backdrop, buyers will continue to seek out affordable markets, which are often correlated with abundant inventory. That's why the Sun Belt region was so hot in 2024.

This year's most popular markets will likely be among the winners next year, in Miller's view. He didn't predict the next boom town but said surges into Texas and Florida have run their course. Those states were red-hot in the early 2020s, though each had level moving flows this year.

"It's not that those markets are less attractive," Miller said. "There's less intensity from inbound migration as millions of new residents get situated. The rate of growth is no longer surging."

However, it appears as if the exodus from large states with highly populated cities isn't over, as three of the five states with the most outbound movers were California, Illinois, and New York. Each of those states has relatively high taxes, and Miller has a hunch that some movers might try to preemptively move before the potential expiration of state and local tax deductions slated for the end of 2025.

• Realtor.com just unveiled its 2025 housing market outlook.
• Home values should rise slightly next year as property sales pick up due to lower mortgage rates.
• However, rent should stay in check due to a massive influx of apartment inventory.

Property owners, prospective buyers, renters, and landlords should expect more of the same in the new year — for the most part.

Home sales and the cost of buying or renting won't be much different in 2025, Realtor.com said in its housing forecast published on December 4. The firm's researchers see sales inching 1.5% higher while home prices climb 3.7% — in line with the rate they've risen since 2012 — and rent stays roughly flat at -0.1%. Mortgage rates should also slide slightly, though they'll stay north of 6%.

Those modestly positive projections are based on what Realtor.com expects to be a healthy economic backdrop typified by lower interest rates and steady growth. The Federal Reserve will likely cut rates in December and then a few more times in the first half of the year, the firm said.

Even more vital is that no one, other than a few contrarians, is calling for an economic downturn. Barring a serious shock, home prices should stay elevated and continue to climb modestly, though they're well off their post-pandemic peak.

"Prices are going to keep rising because we're not going to have a recession," said Ralph McLaughlin, a senior economist at Realtor.com, in an interview with Business Insider ahead of the report's release. "If you look at the times that home prices fall, it's typically only when there's a recession, and only when people are forced to sell."

In addition, it's unclear how President-elect Donald Trump's policies will affect the US housing market, though stock market strategists generally agree that tax cuts and deregulation will boost business confidence. McLaughlin thinks that may have a trickle-down effect for homebuyers.

"If you're talking about the resale market, the existing homes market, it's hard not to become optimistic about just the broader economy, because of things like tax cuts and other benefits to households that might put more money in their pocket at the end of the day," McLaughlin said. He added: "That might encourage them to go out and either buy a home, if they don't currently own one — or grade up to a house maybe they've been waiting to over the last few years."

High on supply

While that backdrop mostly represents business-as-usual, next year's housing market may be marked by a significant development: sizable increases in home and apartment supply.

A long-running home shortage is finally easing, as Realtor.com predicts that 2025 will be the first "balanced" housing market in nine years, meaning neither buyers nor sellers will have disproportionate leverage. That's thanks to an 11.7% jump in existing home inventory and a 13.8% surge in single-family home starts.

Home listings have been on the rise recently in most of the 50 largest US real-estate markets, which defies what Realtor.com had thought would be a big drop in inventory this year. However, there's still a shortfall of 3.7 million homes in the US, Freddie Mac estimates.

Continued supply improvements mean there should be 4.1 months of homes available in 2025, up from 3.7 months now, Realtor.com said. The National Association of Realtors, a competing firm, reported last month that there's already 4.2 months' supply of existing homes available.

Rental inventory is also on the rise, as real-estate site Zumper found that the supply of new apartments in the US hit its highest level in five decades this summer.

That dynamic should cause rent growth to stall, McLaughlin said. Home prices likely won't suffer a similar fate, in his view, because single-family supply will come online slower.

"What we've seen over the past couple years is a large uptick in new multi-family construction, and they tend to be released all at once," McLaughlin said. "And so it can have very sharp and especially isolated impacts on rents — in particular — in urban areas where they are built."

With more options, renters won't be forced to endure the abnormally large rent hikes that became more common during and after the pandemic.

Landlords might also struggle to raise rent substantially in a strong economy with lower mortgage rates since renters could walk away from bidding wars and look at houses instead.

"When incomes grow enough in the rental segment, those renters tend to convert over to owners," McLaughlin said. "They typically won't use their incomes to bid up rents more — they'll just go and, if they can afford it, they'll go buy a house."

McLaughlin continued: "So those that continue to stay renting, landlords don't have the ability necessarily to raise rents at the rates that price growth plays out in most markets."

Still, inventory increases likely won't translate to meaningful discounts on homes or rental units. Prices almost always rise over time along with the population size and money supply, so while apartments may be easier to find, those pining for pre-pandemic prices could be disappointed — even in an otherwise solid year.