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Affordability Drives Buyer Activity

Index: North Port and Naples are in top 5 of 1Q 2022 emerging housing markets as Fla. continues to attract migration from other states. They were top 2 in 4Q 2021.

NEW YORK – In the first quarter of 2022, less expensive cities with strong local economies climbed The Wall Street Journal/Realtor.com Emerging Housing Markets Index, which could be another sign that many home buyers are giving priority to affordability.

In recent years, fast-rising housing prices have pushed buyers from expensive coastal cities into cheaper housing markets, as remote-work opportunities have expanded and people search for different lifestyles during the pandemic.

Economists say that as house prices and mortgage rates continue to increase, more people are expected to migrate. “People are chasing affordability," said Sam Khater, chief economist at Freddie Mac.

The Rapid City, South Dakota, metro area of about 145,000 people near the Wyoming border was the top-ranked market for the quarter. It was followed by Santa Cruz, California; North Port, Florida; Santa Rosa, California; and Naples, Florida.

The top 20 cities in the ranking have an average population size of about 600,000. The top-ranked markets in the first quarter had faster home sales, higher wages and shorter commute times than the market as a whole, said George Ratiu, manager of economic research at Realtor.com.

North Port and Naples were the top two markets in the fourth quarter and held in the top five as Florida continues to attract migration from other states.

Some of the top-ranked markets are also desirable vacation destinations, including Santa Cruz, Naples, and Coeur d’Alene, Idaho.

Source: Wall Street Journal (04/26/22) Friedman, Nicole

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