Top 5 Southern Cities with the Best Housing Market Outlook for Homebuyers in 2023

As the housing market continues to shift, homebuyers are finding better deals than they have in years. According to a recent report by the National Association of Realtors, homebuyers in nearly every region of the country are in a better position to negotiate more favorable terms. This is especially true in the South, which dominates a list of cities with the best housing market outlook as ranked by LendingTree.

Here are the five U.S. cities with the best housing market outlooks, according to LendingTree:

1. McAllen, Texas

   

   • Vacancy rate: 12.59%
   • Housing unit approvals per 1,000: 24.42
   • Home value-to-income ratio: 2.37
   • Change in ratio, 2022-23: 3.90%

2. Wilmington, North Carolina

   • Vacancy rate: 21.16%
   • Housing unit approvals per 1,000: 39.78
   • Home value-to-income ratio: 4.45
   • Change in ratio, 2022-23: 1.51%

3. Winston-Salem, North Carolina

   

   • Vacancy rate: 10.13%
   • Housing unit approvals per 1,000: 18.07
   • Home value-to-income ratio: 3.32
   • Change in ratio, 2022-23: 2.98%

4. Baton Rouge, Louisiana

   • Vacancy rate: 14.25%
   • Housing unit approvals per 1,000: 10.72
   • Home value-to-income ratio: 3.37
   • Change in ratio, 2022-23: 2.49%

5. Augusta, Georgia

   

   • Vacancy rate: 15.90%
   • Housing unit approvals per 1,000: 17.36
   • Home value-to-income ratio: 3.11
   • Change in ratio, 2022-23: 4.89%

LendingTree based its rankings on four key metrics: vacancy rates, housing unit approvals per 1,000 housing units, home value-to-income ratio, and annual changes in home value-to-income ratio. From a homebuyer’s standpoint, high vacancy rates indicate that there are plenty of unoccupied homes in a particular city. This is usually a sign that there’s not much competition for homes, which means you can find good deals. A low home value-to-income ratio is another sign that you can find affordable homes. If the ratio is 2.5, for example, it means median home values are only 2.5 times more than the median income. In a city with a median income of $60,000 and a ratio of 2.5, you should be able to find homes for as little as $150,000. But if the ratio is 5.0, you’re looking at homes of $300,000 or higher.

Nine of the 10 cities ranked by LendingTree as having the best housing market outlook for buyers are located in the South. That includes each of the top five cities. High vacancy rates partly explain why Southern cities rank high, according to Matt Schulz, LendingTree’s chief consumer finance analyst and author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.” But there are other reasons as well. “Many of these are relatively low-income areas,” Schulz said in a press release. “Plus, Southern metros don’t tend to be as densely packed, especially compared to their Northeastern counterparts, meaning there’s more room to build and grow.”

If you’re considering buying a home in one of these cities, now may be the time to take advantage of the shifting dynamics in the housing market and find your dream home at a great price!