Housing Heat Versus Hotness

• Months Of Supply Provides Similar Results To The Various Hotness Indices
• Regional Differences In Market Performances Remain
• Who Came Up With “Hotness” As A Housing Market Term?

I’m a subscriber to ResiClub, an excellent resource on the US housing market. They recently analyzed the Zillow Market Heat Index (ZMHI), which I tend to check in with periodically. My reluctance to rely entirely on Zillow products is related to the travesty of the Zestimates, often discussed here. But I digress…The ZMHI shows the significant regional differences in the housing market. It should be noted that ResiClub has concerns about the ZMHI exacerbating results in some regions. So, I also checked in with The Realtor.com Market Hotness Index, which is a similar effort. By the way, who at Realtor.com dubbed an index a name that a Baby Boomer would have used after a few too many cocktails to awkwardly describe peers walking around the community swimming pool in risque bathing suits? Hotness? Really? At their core, these indices are in the same housing toolbox as Months Of Supply (mos), which is the intersection of supply and demand. MOS is explained as the number of months it would take to sell all listings at the current rate of sales. I also refer to this as the “market pace” or how the market “feels” on the front lines.

Zillow Market Heat Index

The regional disparities are significant, as noted in the ZMHI. As I’ve been talking about most of this year, the Sun Belt regional housing market is softer than the remainder of the country. That’s because it was a migration destination during the pandemic, which tended to have lower housing costs and faster construction times.

Realtor.com Market Hotness Index

The US housing market peaked in early 2022, which is when the Fed pivoted to influence interest rates higher. The intensity of the US market has weakened since then, according to the Realtor.com Market Hotness Index.

The Realtor.com Hotness Map shows similar general patterns as the Zillow effort.

Final Thoughts

It’s not a good idea to look at only sales levels or only listing inventory levels. Supply or demand alone provides a take on the housing market without proper context. Supply, when considering demand, is essential to understanding the pace of the market. John Burns Research & Consulting provides a good summary of why some regions are hot while others are not (hey, that rhymes). Despite the slower market conditions there, Americans continue to move to the Sun Belt.

The Actual Final Thought – With yesterday’s court ruling against tariffs, if it holds, reduces uncertainty significantly and could soften interest rates, therefore being massively beneficial to the housing market.

Here’s My Podcast: What It Means

The latest episode is a click away as well as the podcast feeds for all the “What It Means with Jonathan Miller (WIM).”

Apple (within the Douglas Elliman feed)   Soundcloud  Youtube

Did you miss the previous Housing Notes?

Housing Notes Reads

• The Effects of Tariffs on Inflation and Production Costs [Federal Reserve Bank of San Francisco]
• Older Adults Struggle to Meet the Dual Burden of Housing and Care [Joint Center for Housing Studies]
• The Two-Bedroom Hunt in New York Is Worse Than Ever [Curbed]
• A $34 Million Oceanfront California Home Just Broke Its Own Price Record [Wall Street Journal]

Market Reports

• Elliman Report: Manhattan, Brooklyn & Queens Rentals 4-2025 [Miller Samuel]
• Elliman Report: Florida New Signed Contracts 4-2025 [Miller Samuel]
• Elliman Report: New York New Signed Contracts 4-2025 [Miller Samuel]

Extra Curricular Reads

• What Actually Happens If You Don’t Use Airplane Mode on Your Phone During a Flight? [Travel & Leisure]