THEWOWSKI – Bay Area Real Estate Professionals

Housing Market Update: The Top 5 states

The 5 states with the hottest housing economies

The Housing Heat Index shows how states’ real estate markets are faring in the coronavirus-fueled housing boom, and how they might perform in the future. To calculate the ranking, Bankrate analyzed six data points: annual home price appreciation, share of mortgages past due, unemployment, annual job growth, statewide cost of living index and state-by-state tax burdens.

These five states had the strongest housing economies in the second quarter of 2021:

  1. Utah. Its home values jumped 28 percent in the 12-month period that ended June 30, second-best among U.S. states, according to the Federal Housing Finance Agency. Utah posted the second-strongest unemployment rate in the nation in June 2021, according to a Bankrate analysis of Labor Department data. What’s more, Utah’s tax burden is among the lowest in the nation, according to the Tax Foundation.
  2. New Hampshire. The geographic oddity in our ranking, New Hampshire saw home values jump 22 percent, and the unemployment rate and tax burden are low.
  3. Washington. The state experienced 22 percent home price appreciation, and just a tiny fraction of homeowners are behind on their mortgages.
  4. Montana. Home prices rose 24 percent in the past year, and Montana has the nation’s lowest level of past-due mortgage payments, according to the Mortgage Bankers Association.
  5. Arizona. Home values surged 24 percent, and few homeowners have fallen behind on their loans.

Homebuyers seek affordability, space

The prominent rankings of states in the Mountain time zone illustrate a shift in the housing market: Americans are still drawn to healthy labor markets, but even before the coronavirus pandemic, they were growing less willing to pay up to live in places like San Jose, Seattle and Boston.

COVID-19 has pushed many — especially those who can work remotely — to leave the priciest areas for more affordable regions.

“We are seeing the makings of a renewed affordability migration,” says Mark Vitner, senior economist at Wells Fargo. “The beneficiaries of that shift have largely been the midsized metros in the mountain states of the West.”

The median price of a single-family home sold in Silicon Valley during the second quarter rose to a whopping $1.7 million, according to the National Association of Realtors. The typical price in Salt Lake City was $485,100 — above the national median, but not dramatically so, and just a fraction of the price paid by residents of Northern California.

The price gap has spurred many in high-cost markets to consider moving. The notion is especially appealing to workers who can take their high-wage jobs to areas with lower costs of living.

“People suddenly have the ability to choose where they live, because they’re not tethered to an office,” says Alicia Holdaway, an agent at Summit Sotheby’s International Realty in Draper, Utah, and past president of the Salt Lake City Board of Realtors. “We’ve had a net in-migration that’s been happening for years, and that’s only increased.”

Every boom brings its disadvantages, of course. In some cases, new arrivals to Utah’s housing market are flush with cash and willing to bid up prices.

“There’s always a flip side,” Holdaway says. “We’ve been seeing housing affordability become a crisis.”

The 5 states with the coolest housing economies

As a nationwide housing boom rages, every state saw property values increase during the 12 months that ended in June. However, some state economies are struggling with weak job growth and other challenges. The bottom 5 on our index:

  • 47. Washington, D.C. The district ranked in the middle of the pack in several measures but was weighed down by weak job growth.
  • 48. Mississippi. Low ranks in price appreciation and past-due mortgages placed Mississippi near the bottom of the pack.
  • 49. West Virginia. The state posted comparatively tepid appreciation of 12 percent, along with weak job growth.
  • 50. Oklahoma. The state ranked near the bottom in home price appreciation and job growth.
  • 51. Louisiana. It ranks worst in past-due loans, with nearly 9 percent of homeowners behind on their mortgage payments. Louisiana also fares poorly on price appreciation, job growth and tax burden.


To calculate the Housing Heat Index for the second quarter of 2021, Bankrate analyzed six data points:

  • annual home price appreciation for the second quarter as reported by the Federal Housing Finance Agency’s Home Price Index;
  • share of mortgages past due for the second quarter as reported by the Mortgage Bankers Association;
  • unemployment rate for June from the U.S. Labor Department;
  • annual job growth as of June from the U.S. Labor Department;
  • the cost of living index for 2021 from the Center for Regional Economic Competitiveness;
  • state-by-state tax burdens for the 2020-21 fiscal year as reported by the Tax Foundation.

The index overweights home price appreciation, the metric that most clearly conveys a housing market’s desirability. And the index underweights cost of living and tax burden — home prices can soar despite those factors, but a new wave of remote work makes those factors more relevant than they were in the past.

Housing Heat Index for second quarter of 2021
StateOverall rankAppreciation rankPast due loans rankJob growth rankUnemployment rankCost of living rankTax rank
District of Columbia47323247435146
New Hampshire291393416
New Jersey2416482444350
New Mexico45412748512323
New York3225475473648
North Carolina15192419221310
North Dakota4250839123317
Rhode Island135267344637
South Carolina29213536211833
South Dakota17372233202
West Virginia49464249301122

Does this mean we’re in a housing bubble?

A lot real estate enthusiasts are concerned or have questions in regards to a current housing bubble. As data shows, this doesn’t appear to be a housing bubble but more of a housing shortage with more employees working remotely.