America's hottest housing markets are in the suburbs, report finds: Tips for achieving the suburban dream

Historically low mortgage rates and below-average housing supply have created the perfect storm for a highly competitive real estate market — and it doesn't look like it'll transition to a buyer's market anytime soon. The median home price is expected to surge for the rest of 2021, according to predictions from Fannie Mae, and mortgage rates may remain low in the coming months.

But some areas of the country are facing an even higher demand from homebuyers, according to Realtor.com's list of the top 10 hottest zip codes. The report found that, once again, the suburbs are among the most desirable areas for Americans looking to buy a home.

Buying a home in one of these hot markets may be challenging, but it's not impossible. And with 30-year mortgage rates hovering below 3%, there has seldom been a better time to take out an affordable home loan. 

Keep reading to learn more about buying a home in a competitive housing market and what you can do if homebuying proves too difficult. When you're ready to buy a home or refinance your current mortgage, you can compare rates on Credible without impacting your credit score.

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The 10 hottest zip codes for homebuyers in America

The suburbs are harshly judged for being uneventful and disconnected, with an exhausting commute to the bustling cities they surround. But despite the negative reputation, suburbs have proven to be a popular choice for American families that want to be close to metropolitan areas but can't move to the city for lack of affordability.

Plus, with many large employers scrapping office return plans amid the COVID-19 pandemic, newly remote workers don't need to pay a premium for big city living. The suburbs have more to offer than ever before, according to Realtor.com senior economist George Ratiu.

"The suburbs of today are not your grandfather’s, or even your parents’, suburbs," Ratiu said in a press release. "Those were really insular places where neighborhoods were basically islands. Today’s suburbs are a lot more integrated — and a lot more diversified."

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Suburban areas have yet again topped Realtor.com's list of desirable zip codes, reassuring their dominance over big cities and rural areas. The suburbs with surging demand, price increases and booming home sales are as follows: 

1. Colorado Springs, Colo. (Denver)
2. West Irondequoit, N.Y. (New York)
3. Peabody, Mass. (Boston)
4. Manchester, N.H. (Boston)
5. Brentwood, N.C. (Raleigh)
6. Lincoln Village, Ohio (Columbus)
7. Milford, Mass. (Worcester)
8. Concord, N.H. (Boston)
9. Farmington, Mich. (Detroit)
10. Franklin, Tenn. (Nashville)

Prospective buyers in these areas — or really anywhere, since housing demand is so high — should act fast and be prepared to make an offer if they want to buy a home. The first step toward making a serious offer is getting a mortgage. Compare mortgage rates from several lenders in the table below, and get prequalified for a mortgage on Credible.

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Tips for buying a home in today's hot real estate market

Although the housing market is showing a trend of cooling in some parts of the country, it's still fiercely competitive in many places like the areas listed above. While it can be difficult to buy a home in a seller's market, it's not impossible. The following tips can help prospective homebuyers stand out in a hot housing market:

• Be flexible with your closing date. When a seller is choosing between multiple offers, closing date flexibility can help set your offer apart from the rest.
• Be ready to offer above the list price. Many homes are selling far above what the seller is asking for. Determine how much of a home loan you can afford with a mortgage payment calculator.
• Be prepared with a pre-approval letter. This proves to the real estate agent that you are a serious buyer who has secured mortgage financing and is ready to make an offer.

You can get pre-approved for a mortgage in just minutes on Credible's online loan marketplace. 

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Consider refinancing your mortgage if moving isn't an option

Low inventory and high demand have made it a challenging time to buy a home, leaving many prospective buyers priced out of the market. Thankfully, there's another way to take advantage of record-low mortgage rates without having to buy a new home.

Mortgage refinancing allows you to take out a new home loan with better terms to replace your current mortgage. With a low interest rate, you may be able to pay off your home loan faster, lower your monthly payments and save money in interest charges over the life of the loan.

Keep in mind that mortgage refinancing comes with closing costs, which are typically about 2-3% of the principal amount of the new loan. You should plan to live in your house for at least a few more years after refinancing in order to offset closing costs.

If you're considering refinancing your mortgage, it's important to shop around for lower rates than what you're currently paying. You can check your estimated mortgage refinance rates on Credible without impacting your credit score, so you can find the best mortgage refinance loan for you.

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