Introduction
The housing market entered the new year on somewhat steadier footing, as borrowing costs eased modestly from recent highs and inventory continued to inch higher in many markets. Mortgage rates, which spent much of 2025 hovering above 6.5%, drifted lower toward the end of the year, offering buyers limited but welcome relief. The slight improvement in financing conditions, combined with a gradual rise in active listings, helped sustain buyer interest through the winter months, even as overall activity remained below pre-pandemic norms.
Despite these incremental gains, affordability challenges continue to weigh on both buyers and sellers. Home prices remain elevated relative to incomes, and many would-be sellers remain locked into low-rate mortgages, slowing the pace of inventory recovery. As a result, market conditions remain uneven, with some metros seeing improved balance between supply and demand while others remain constrained.
Recent economic data point to a slowing but still resilient labor market. Job growth has moderated from earlier peaks, and unemployment has hovered near the low-4% range. In response to softer economic momentum and cooling inflation pressures, the Federal Reserve has eased policy, cutting its benchmark rate and signaling openness to additional adjustments if conditions warrant. While mortgage rates do not move in lockstep with the Fed’s actions, the shift has helped stabilize expectations and reduce some of the volatility that defined the market earlier in the cycle.
In this environment, housing demand has become increasingly selective. Buyers are prioritizing markets that offer relative affordability, manageable competition, and long-term livability, while higher-cost metros continue to face headwinds from stretched budgets and slower turnover. Regionally, the divide remains pronounced. Many Midwestern and Northeastern markets continue to experience tight conditions driven by limited supply and steady demand, while parts of the South and West are seeing a gradual rebalancing as new construction and slower price growth help restore equilibrium.
Against this backdrop, the Winter 2026 WSJ/Realtor.com Housing Market Ranking highlights the markets best positioned to offer buyers a balance of opportunity and stability as the year begins.
January 2026 WSJ/Realtor.com Housing Market Ranking
As the housing market begins 2026, buyers are navigating a landscape shaped by higher, but improving, borrowing costs, uneven inventory growth, and persistent affordability pressures. While national home prices have largely stabilized compared with recent years, conditions continue to vary widely by market. In this environment, metros that combine relative affordability with steady demand, improving supply conditions, and strong quality-of-life fundamentals are emerging as standouts.
The January 2026 ranking evaluates the 200 most populous U.S. metropolitan areas using a combination of housing market conditions and broader measures of economic health and livability. Together, these factors highlight markets where buyers are more likely to find balance in an otherwise challenging housing environment.
| Rank | Metro | Pop. | Unemployment Rate (%) | Median Home Listing Price December 2025 |
| 1 | South Bend-Mishawaka, Ind.-Mich | 325,294 | 4.3% | $277,000 |
| 2 | Appleton, Wis. | 248,992 | 2.7% | $377,000 |
| 3 | Manchester-Nashua, N.H. | 430,462 | 3.2% | $550,000 |
| 4 | Canton-Massillon, Ohio | 400,551 | 5.1% | $234,000 |
| 5 | Lancaster, Pa. | 563,293 | 3.3% | $397,000 |
| 6 | Springfield, Mass. | 464,151 | 5.8% | $344,000 |
| 7 | Norwich-New London, Conn. | 282,602 | 3.7% | $446,000 |
| 8 | Milwaukee-Waukesha-West Allis, Wis. | 1,574,452 | 3.4% | $370,000 |
| 9 | Akron, Ohio | 702,209 | 5.1% | $217,000 |
| 10 | Rockford, Ill. | 337,103 | 5.1% | $246,000 |
| 11 | Hartford-West Hartford-East Hartford, Conn. | 1,169,048 | 3.8% | $422,000 |
| 12 | Peoria, Ill. | 364,565 | 4.6% | $160,000 |
| 13 | Lansing-East Lansing, Mich | 479,971 | 5.0% | $233,000 |
| 14 | Green Bay, Wis. | 334,697 | 2.8% | $417,000 |
| 15 | Kalamazoo-Portage, Mich | 264,780 | 4.9% | $320,000 |
| 16 | Hagerstown-Martinsburg, Md.-W. Va. | 311,295 | 3.8% | $352,000 |
| 17 | Flint, Mich | 402,279 | 6.7% | $186,000 |
| 18 | Springfield, Mo. | 496,975 | 3.8% | $327,000 |
| 19 | Grand Rapids-Wyoming, Mich | 1,178,826 | 4.6% | $397,000 |
| 20 | Fort Wayne, Ind. | 462,978 | 3.4% | $299,000 |
Stability-Driven Economies and Housing Markets
This quarter’s rankings are led largely by mid-sized metros, particularly across the Midwest and Northeast, where housing demand remains solid and affordability pressures are more manageable than in many large coastal markets. These areas have distinguished themselves over the past several years for their resilience amid a shifting housing market, a cooling economy, and growing climate-related uncertainty.
Many of the top-ranked markets are supported by local economies anchored in long-established industries such as health care, higher education, manufacturing, logistics, and insurance, sectors that tend to provide steady employment across economic cycles. This stability supports consistent housing demand and helps insulate these markets from the sharper swings seen in boom-and-bust regions. More than half of the top 20 markets currently post unemployment rates below the national average, led by Appleton, Wis. (2.7%), Green Bay, Wis. (2.8%) and Manchester-Nashua, N.H. (3.2%).
Climate resilience also stands out among these markets. On average, just 5.7% of homes in the top 20 are at risk of climate-related damage over the next 30 years, compared with 45.8% across the full 200-market universe. Climate risk has become increasingly salient for buyers following recent disasters, and lower exposure may factor more heavily into home-shopping decisions going forward.
Relative Affordability and Everyday Livability
Affordability remains a defining feature across the top-ranked markets, particularly relative to nearby large cities and national coastal hubs. While prices vary, housing costs and monthly payments in these metros tend to be more accessible, making them attractive to first-time buyers, families, and households seeking long-term value. Several also function as lower-cost alternatives to nearby job centers, allowing residents to remain connected to regional economies without paying premium housing prices.
On average, household incomes in the top 20 metros fall just 3.6% below the level recommended to purchase a median-priced home. By comparison, incomes across the 200 largest metros are typically 20.0% below that threshold. In some of the most affordable markets, such as Peoria, Ill. and Akron, Ohio, typical local incomes exceed the recommended level by 78.9% and 28.0%, respectively. At the other end of the spectrum, Green Bay, Wis. and Manchester–Nashua, N.H. see income gaps of 27.1% and 25.9%, underscoring that affordability challenges persist even among top-ranked markets.
Beyond cost, these metros offer a strong sense of everyday livability. Walkable or revitalized downtowns, access to local restaurants and retail, parks and recreational amenities, and relatively manageable commute times support quality of life without pushing housing costs into luxury territory. This balance continues to resonate with buyers prioritizing practicality and livability.
Climbing Down Payments in Top Markets
The highest-ranked markets combine relatively affordable home prices, stable job markets, and ample local amenities, drawing interest from buyers both within and outside their metro areas. As a result, down payments in these markets climbed an average of 9.7% year over year in Q4 2025, compared with an 8.7% decline nationally.
Rising down payments reflect a combination of growing competition, modest price appreciation, and increased participation from higher-income buyers. Home prices in the top-ranked markets rose an average of 3.9% in December 2025, while prices nationally declined by 0.6%. Taken together, these trends suggest that although affordability remains relatively strong, buyers in these markets continue to face competitive conditions.
Larger, higher-income metros played an outsized role in driving demand across the top-ranked markets this quarter. Chicago was the leading out-of-market source of listing views for seven of the top 20 markets, followed by New York (three markets), Boston (two), and Washington, D.C. (one). Demand from higher-income buyers can intensify competition and push prices higher, as local households compete with purchasing power from outside the metro area.
City Spotlight: Norwich–New London-Willimantic, CT
Norwich-New London, Conn. climbed 14 spots since last quarter to rank seventh overall, reflecting its growing appeal among buyers seeking value within reach of major Northeast job centers. Located within roughly 50 miles of Providence, Hartford, and New Haven, the metro offers regional connectivity while maintaining lower housing costs than many surrounding markets.
The local economy is anchored by health care, higher education, defense-related activity, and advanced manufacturing, with institutions such as Connecticut College, the U.S. Coast Guard Academy, and re