Rockford Rocks The Rankings – Illinois City Takes Top Spot In Hottest Housing Markets

Rockford, Illinois, is basking in the spotlight after Realtor.com named it the No. 1 hottest housing market in December.

The city has unseated Manchester, New Hampshire, a longtime favorite that has held the top spot an impressive 31 times since the rankings began in 2017. It's a positive sign for Rockford and a source of pride for its residents.

Rockford homes, priced at a median of $242,000, are selling rapidly, spending an average of 43 days on the market versus the national average of 70.

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"Rockford's hotness means that high demand is met with low inventory as buyers claim available homes," Realtor.com senior economic analyst Hannah Jones wrote in the report. "This affordable area has seen sustained demand this year as mortgage rates and home prices deter buyers from searching in higher-priced areas."

The positive trend comes after Rockford topped last year's Wall Street Journal/Realtor.com list of housing markets to watch.

Located 90 miles northwest of Chicago and 90 miles southwest of Milwaukee, the city boasts a diverse economy with several hospital systems, aerospace companies and manufacturing jobs. But Rockford's unemployment rate remains higher than the national average, sitting at 8.1% as of November.

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Northeast And Midwest Dominate Housing Market

The Northeast and Midwest continued their reign as the hottest housing markets in the country, claiming all 20 spots on the list for the 15th straight month. In December, the two regions each captured 10 of the top markets.

"The Midwest and Northeast have reigned supreme as homes to most of the country's hottest markets since mid-2022 when mortgage rates picked up steam," Jones said.

December's hottest housing markets list exhibited high stability, with 15 of the 20 markets also appearing on the November list. Newcomers to the top 20 included Norwich, Connecticut; Topeka, Kansas; Dayton, Ohio; Harrisburg, Pennsylvania; and Peoria, Illinois, all of which moved up from within the top 35 of the previous month.

However, the Northeast and Midwest’s consistent dominance underscores a broader issue: a lack of geographic diversity within the national housing market. The trend coincides with two consecutive years of the lowest home sales volume since 1995, suggesting a degree of stagnation in the overall market.

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Hottest Markets Continue To Buck National Trend With Price Growth

While national home prices dipped 1.8% year-over-year in December, the hottest housing markets continued to defy the trend. On average, list prices in these cities increased by 2.7% compared to the previous year.

The upward trajectory was evident in 14 of the 20 cities on the list, driven by persistent strong demand. Rockford led the pack with a 21% year-over-year surge in median list prices. Harrisburg (9%) and Milwaukee (7%) followed closely behind.

Some Cities Cool Down While Others Rise

Five cities that exited the top 20 hottest markets in December – Erie, Pennsylvania; New Haven, Connecticut; Cleveland, Ohio; Allentown, Pennsylvania; and Lafayette, Indiana – had already occupied the bottom positions on the list the previous month. Their departure from the top 20 reflects a modest shift in market dynamics.

Meanwhile, Southern metros experienced the most significant annual declines in "hotness" ranking. Nashville, Tennessee, saw the steepest drop, plunging 97 spots on the list compared to the previous year. Rocky Mount, North Carolina and Orlando, Florida, followed closely behind, plummeting 92 spots.

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