Buffalo, New York is projected to be the hottest housing market of 2024, according to an analysis from real estate company Zillow.

Zillow called affordability the "most powerful force driving real estate," bringing lower-cost markets in the Great Lakes, Midwest and South regions to the top of the company's 2024 rankings.

"Housing markets are healthiest where affordable home prices and strong employment are giving young hopefuls a real shot at buying and starting to build equity," said Anushna Prakash, data scientist for Zillow Economic Research.

"I'm cautiously optimistic that the housing market will get back on stable footing in 2024 − we shouldn't see the massive price spikes of the early pandemic or fast-rising mortgage rates of recent years," Prakash said.

There are some signs the housing market will improve in 2024. Mortgage rates dropped steadily over the past seven weeks, averaging 6.61 % for a 30-year fixed mortgage, the week ending Dec. 28. The lower mortgage rates provided a boost to existing-home sales, which grew in November, up 0.8% from October and breaking a streak of five consecutive monthly declines, according to the National Association of Realtors.

However, one thing most experts don't expect to see is an end to shortage of homes for sale.

"Despite this, households will have more options in 2024 from a small uptick in single-family home construction, and the completion of the large number of multifamily units that are under construction, the vast majority of which are destined to be rental homes," Danielle Hale, chief economist for Realtor.com, told USA TODAY.

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Methodology

The company said the ranking examines the nation's 50 most populous metros and takes into account Zillow's forecast for local home value growth and the speed at which home sellers are entering contracts with buyers.

The analysis also incorporates:

• Expected home value appreciation from Dec. 2023 through Nov. 2024
• Job growth per new home permitted
• Growth in owner-occupied households

According to Zillow's analysis, Buffalo has the highest number of new jobs per home permitted – a measure of expected demand, as new jobs often mean new residents.

Zillow also measured typical home value, the average mortgage payment, typical rent, and the average number of days a house is on the market for each city.

Top 10 housing markets of 2024, according to Zillow

1. Buffalo, New York
2. Cincinnati, Ohio
3. Columbus, Ohio
4. Indianapolis, Indiana
5. Providence, Rhode Island
6. Atlanta, Georgia
7. Charlotte, North Carolina
8. Cleveland, Ohio
9. Orlando, Florida
10. Tampa, Florida

Cities who moved into, out of the list from 2023

Charlotte was No. 1 on the list last year and has moved down to No. 7 in 2024. Cleveland and Atlanta also returned from last year's top 10, according to Zillow.

San Antonio, ranked No. 4 in 2022 and No. 13 last year, fell to the 49th spot in 2024.

Contributing: Swapna Venugopal Ramaswamy, USA TODAY