Single-family existing home prices rose at their fastest pace in five decades throughout 2021, but some rare markets are still offering relatively affordable housing driven by undervalued home appreciation, according to the National Association of Realtors. Hidden gem housing markets have low median home price to median family income ratio, maximizing affordability for buyers into the new year.
In 2022, the top 10 hidden gem markets will be located in the Sunbelt region in smaller metro areas like Dallas, Texas and Knoxville, Tennessee. Despite current affordability, strong migration into these areas in the coming year will likely drive up home price appreciation and create more market competition down the road.
In 2021, single-family existing-home prices rose at the fastest pace in five decades at an average year-over-year pace of 18%, driven by strong job growth, historically low mortgage rates, a post-pandemic recovery in household formation, and inadequate housing construction and pandemic-induced supply bottlenecks. At the metro area level, the differences in price appreciation were heavily driven by job growth and by businesses and people moving into the area, especially among workers with the ability to work fully remotely.
Are there markets where home prices are still undervalued relative to the market fundamentals' underlying home prices? In its latest report, 2022 Housing Market Hidden Gems, the National Association of REALTORS® identified the top 10 markets with strong underlying housing market fundamentals but where home prices are still undervalued and relatively affordable. As such, these hidden gem markets are expected to experience stronger price appreciation in 2022.
For the list of the top 10 hidden gem markets in 2022 …
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