Despite 30-year, fixed-rate mortgage rates falling to about 6.8% from October’s highs, which approached 8.0%, the national U.S. housing market remains somewhat frozen given the huge share of existing owners locked in place with mortgages well below 6%.

However, with continuing signs that inflation is ebbing and predictions that the Federal Reserve will begin cutting its own rates by the middle of 2024, if mortgage rates also decline, the market should slowly begin to thaw with more transactions. Still, since this thaw will not be equal for each housing market, buyers and sellers armed with the most research will be in the best position to jump into the market when the timing is right.

Our analysis of the hottest housing markets pulls from the U.S. News Housing Market Index, which incorporates a wide array of data points and provides a simple yet comprehensive way to rank the covered metropolitan statistical areas (MSAs) from frozen to blazing on a scale of 1-100. This particular ranking is based on data from December 2023.