In recent years, the US real estate market has experienced a significant rise in home prices, driven by low mortgage rates and strong demand. However, as the Federal Reserve started hiking interest rates in March 2022 to combat inflation, mortgage rates have steadily increased, leading to a decline in home prices. To help homebuyers navigate the recent turbulence, SmartAsset compared home value data for 400 metropolitan areas between 1998 and 2022, calculating cumulative increases during that time, as well as the frequency of significant drops in value, and identified the best and worst housing markets for growth and stability. Here are the top five best housing markets for growth and stability:
The Austin-Round Rock-Georgetown metro area in Texas ranks as the best housing market for growth and stability, with home prices having risen by 353.92% between 1998 and 2022, the most cumulative growth in the study, without much downside. The population has nearly doubled in the last 20 years, supported by the presence of large tech companies, including Apple, Amazon, and Tesla, that support the local economy.
Located in West Texas, the Midland metro area ranks second-best, with home prices rising by 255.5% between 1998 and 2022, more than 91% of the metro areas in the study. Local oil and gas reserves help support the local economy, including the recent discovery of one of the largest US oil reserves.
Boulder, Colorado, home to the University of Colorado's flagship campus, ranks third-best for housing market growth and stability. Between 1998 and 2022, home prices rose by 256.48%, the 33rd most out of the 400 metro areas. While Boulder hasn't experienced quite the same population spike as the top two cities, it hosts offices of Google and IBM and has a reputation as a startup city.
Fort Collins, located about one hour north of Boulder, has a similarly strong housing market. The city saw average home prices go up 224.17% between 1998 and 2022, putting Fort Collins in the top 20th percentile for growth. Fort Collins draws in many people thanks to local natural features like Horsetooth Face Open Space and the Cache la Poudre River, as well as opportunities with Colorado State University.
The Kennewick-Richland metro area of southeastern Washington benefits from a diverse local economy, with home prices increasing by 211.07% between 1998 and 2022, while the population has grown by roughly 40%.
These cities and regions have not only seen strong growth in home prices but also provide stability in their local economies. The presence of large employers, diverse industries, natural features, and a growing population help ensure the continued growth and stability of these housing markets.
