Top 10 most sought-after real estate markets in the U.S.

Homebuyers are voting with determination, heading to real estate markets with more affordable and spacious housing. In its new report, "The Hottest Zip Codes of 2023," Realtor.com identified the hottest cities where eager homebuyers have come, unperturbed by rising mortgage rates and dwindling supply.

Why some real estate markets are still at their peak. A Realtor.com report shows that demand has fallen in previously hype markets, especially in the Pacific and Southwest regions. Soaring real estate prices that have not recovered to pre-pandemic levels, plus mortgage rates that recently hit 7.23%, mean that many''potential buyers simply can't stretch that purchase. Another onerous factor of high interest rates is the 'entrenchment' of homeowners worried about being able to afford a more expensive mortgage after selling their current home. This dynamic further reduces the available supply of real estate on the market.

The data from Realtor.com, however, shows that there are two categories of buyers driving demand in the 10 hottest markets. Demand has increased in select zip codes within the more expensive major metros, indicating that higher-income buyers are persistently seeking a better quality of life rather than cheap housing. At the same time, more affordable markets with more housing stock in''Midwest and parts of the Northeast are becoming popular with middle-class buyers.

The top ten zip codes in the Realtor.com rankings showed an average price appreciation for the first half of 2023 of 7.2%, nearly 75% higher than the U.S. average price appreciation of 4.2%.

The top 10 zip codes to buy a home

The "Hottest Zip Codes" ranking takes into account:

1. market demand based on the number of unique visitors to a property on Realtor.com
2. number of days during which the''Realtor.com sale listing remains active

The top 10 neighborhoods combine a high number of unique visitors per listing and quick home sales. Six of the top 10 hottest zip codes are in the Northeast, and four are in the Midwest. The South and West regions do not make the top ten due to high cost reasons.

Most of the hottest zip codes listed share common elements of value, but the main common factor is usually the availability of larger homes. Overall, typical housing in 7 of the 10 hottest zip codes appears to be more spacious than the average for the respective metro. In addition, households in zip codes 07450 (Ridgewood, New Jersey), 01810 (Andover,''Massachusetts) and 14534 (Pittsford, New York) are 19.7% above the U.S. average of 2.5 people.