SANTA CLARA, Calif. - Many buyers are leaving their high-priced big cities to find homes in relatively smaller ZIP codes, areas that offer "more bang for their buck" amid high U.S. inflation and mortgage rates, according to real estate experts.
Realtor.com, a real estate listings website, compiled America’s "hottest ZIP codes of 2022." Eight of the ten postal codes on the list are in the U.S. northeast, while the Midwest and South each have one ZIP on the list.
The U.S. West was not represented in this year’s top 10, as "affordability concerns have pushed buyer interest elsewhere," the website said in its report.
The ranking takes into account two aspects of the housing market: demand, which is measured by unique viewers on Realtor.com’s property listings, and pace of the market, which is calculated based on the number of days a listing remains active.
"The hottest areas are those that have high demand from buyers, in other words, lots of unique viewers per each property listed for sale, and fast-selling homes, an indicator of limited supply," the report noted.
In the top 10 ZIP codes, homes received nearly four times (3.7) more buyer views than a typical U.S. listing on the site. They also spent 20 to 26 fewer days on market than the typical US home, according to Realtor.com.
Top 10 hottest ZIP codes of 2022
East Coast urban dwellers drove demand for the hottest ZIP codes, with many buyers in Boston, New York, and Washington, D.C. metro areas shifting their eyes toward lower-priced areas.
Overall, these ZIP codes tended to offer more space for the money. Homes had median square footage of 1,946, which was about 60 square feet larger than the typical home for sale around the country in June. Furthermore, the price per square foot for homes in the hottest zip codes was 8.7% lower than their surrounding metros in June.
"A key theme of this year's wicked-hot ranking is demand from out-of-ZIP home shoppers, driven by factors including relative affordability and convenient travel to big East Coast cities," Realtor.com said in a statement.
Topping this year's ranking was ZIP code 14618, Brighton, N.Y., located in the Rochester metro area. Realtor.com said that compared to U.S. averages, this ZIP code's homeownership rates are higher among millennials (56.9% vs. 51.3%) and overall (70.8% vs. 65.2%). Local buyers also make a typical down payment of 15.7% and credit score of 745, as well as a higher median income than the U.S. average ($106,150 vs. $72,465).
At No. 2 on the 2022 list, ZIP code 03681 in Nashua, New Hampshire, is located just 42 miles from Boston — or within a 1.5-hour commute. In Boston, residents pay top dollar for both rentals and buying property.
The 2022 Hottest ZIP Codes in America, in ranking order:
- 14618 Brighton, N.Y.
- 03062 Nashua, N.H.
- 43085 Worthington, Ohio
- 03038 Derry, N.H.
- 04062 Windham, Maine
- 18017 Bethlehem, Penn.
- 37604 Johnson City, Tenn.
- 03106 Hooksett, N.H.
- 02760 North Attleboro, Mass.
- 04210 Auburn, Maine
The ranking was limited to one zip code per metropolitan area, Realtor.com noted.
Higher share of millennials buying in these ZIP codes
Millennials, who are currently aged between 25 and 44, are a "key cohort" of aspiring homeowners, both first-time and repeat buyers, Realtor.com said.
"This generation is ready and willing to pursue home buying opportunities in the hottest ZIPs, where they have the advantage of strong financial qualifications," Realtor.com said.
Millennials are buying homes in these top 10 ZIP codes with incomes that are higher than the national averages among those aged 25 to 34 ($83,782 vs. $70,510) and aged 34 to 45 ($100,966 vs. $89,365).
Furthermore, a higher share of this generation has successfully bought homes in these ZIP codes (57.1%), on average, than in the U.S. overall (51.3%).
This story was reported from Cincinnati.