Metros that combine relative affordability with steady demand, improving supply conditions and durable quality-of-life fundamentals are emerging as standouts in a housing market still weighed down by high prices and stretched household budgets.
The U.S. housing market entered the new year on firmer footing, supported by easing borrowing costs and rising inventory. But affordability remains constrained, with home prices still elevated relative to incomes and many would-be sellers locked into ultra-low mortgage rates, according to the winter Wall Street Journal/Realtor.com housing market ranking.
As a result, housing demand has become increasingly selective. Buyers are gravitating toward markets offering manageable competition, relative affordability and long-term livability, while higher-cost metros continue to face slower turnover and affordability headwinds. Regionally, the divide remains pronounced. Many Midwestern and Northeastern metros are seeing tight conditions driven by limited supply and steady demand, while parts of the South and West are gradually rebalancing as new construction and slower price growth help restore equilibrium.
South Bend–Mishawaka, Indiana–Michigan, topped the ranking, supported by a 4.3% unemployment rate and a median home listing price of $277,000 in December. Appleton, Wisconsin, ranked second, with unemployment of just 2.7% and a median listing price of $377,000. Manchester–Nashua, New Hampshire, placed third, with a 3.2% unemployment rate and a median listing price of $550,000.
Rounding out the top five were Canton–Massillon, Ohio, with a 5.1% unemployment rate and a $234,000 median price and Lancaster, Pennsylvania, where unemployment stood at 3.3% and the median listing price was $397,000. The top 10 also included Springfield, Massachusetts; Norwich–New London, Connecticut; Milwaukee–Waukesha–West Allis, Wisconsin; Akron, Ohio and Rockford, Illinois.
Many of the highest-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, the report said. More than half of the top 20 markets posted unemployment rates below the national average.
Climate resilience also emerged as a differentiator. On average, just 5.7% of homes in the top 20 markets face climate-related risk over the next 30 years, compared with 45.8% across the broader 200-market universe, a factor that has become increasingly salient for buyers following recent natural disasters, the report said.
On the affordability front, household incomes in the top 20 metros are, on average, just 3.6% below the level recommended to purchase a median-priced home, vs. a 20% gap across the 200 largest metros. In some markets, including Peoria, Illinois and Akron, Ohio, typical incomes exceed the recommended threshold, though affordability challenges persist even among top-ranked metros.
Despite relatively stronger fundamentals, competition remains firm. Down payments in the top-ranked markets rose an average of 9.7% year-over-year in the fourth quarter of 2025, while nationally they declined 8.7%. Home prices in these metros increased 3.9% in December, compared with a 0.6% national decline.
"Taken together, these trends suggest that although affordability remains relatively strong, buyers in these markets continue to face competitive conditions," the report said.
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