HW Media acquires Altos Research to expand access to real-time housing data

View Now!

LendingTree Ranks Most Competitive Housing Markets

We’ve been hearing for years about competitive housing markets, but with low housing inventory and rising home prices, almost any market/city can be competitive these days.

What it really comes down to is the competition among buyers. If you’re shopping in a market where most of your competition has subpar credit and can afford only a meager down payment, you could potentially knock them out of the race if you come ready with a healthy down payment and stellar credit. Vice versa, if you’re a borrower with average credit and a small down payment, you may feel as if the cards are stacked against you, but having a pre-approved mortgage can improve your odds of landing that dream home.

In a new study, LendingTree ranked the top 100 Most Competitive Housing Markets based on the factors that truly create a competitive market for homebuyers — how many house hunters are putting more money down, have high credit scores and start loan shopping before home shopping.

We looked at 1.5 million purchase mortgage loan requests that came through the LendingTree marketplace in the 100 largest cities in 2017. Then, we ranked each city based on three criteria:

The share of buyers shopping for a mortgage before identifying the house they want. Buyers with financing in place are more appealing to sellers and can compete with cash buyers.
Average down payment percentage. Having a higher amount of money saved for a down payment can enable you borrow more money or be offered a lower interest rate, allowing you to make a stringer offer.
Percentage of buyers who have prime credit (above 680). Borrowers with higher scores have more financing options to make more competitive offers.

Here’s what we found out:


California markets dominate the top 10.

Six of the top 10 most competitive housing markets are in California. San Francisco and San Jose lead the rankings in 2018, with a vast number of credit-worthy and well-heeled borrowers making it one of the most challenging markets for prospective home shoppers.

Some 60% of home shoppers applied for a mortgage before identifying a house. The two cities also came to the table with the highest average down payment of any region, at 19%. Furthermore, nearly two-thirds (64%) of Bay Area shoppers had prime credit scores, above 680.

Tech industries are key.

The strength in the Bay Area may be attributed to the concentration of high-paying technology jobs. This also applies to Seattle, which came in at No. 7, and Portland at No. 9.

Go West. When you get to the water, keep going.

The top 10 are all in western states. If you go further west you get to Honolulu, another top 10 city. The rest of the country comes into play with Boston at No. 11, also a tech hub.

The most accessible markets in the U.S.

The opposite of being the most competitive is not a bad thing. Here are the most accessible cities for home shoppers in the U.S.:


At the other end of our list are three cities where less than half of home shoppers apply for their mortgage before house hunting; the average home shopper offers a down payment of just 12%; and less than 40% of shoppers have prime credit scores. This is great news for buyers in Youngstown, Ohio, McAllen, Texas, and Scranton, Pa., and other accessible cities, which are often in rustbelt and southern states, as homeownership is accessible to a larger part of the population.

How to shop smarter in a competitive real estate market

Regardless of the level of competition in your area, being a well-prepared buyer increases your odds of securing that dream home. Use these tips to make your offer stand out:

Shop for a mortgage before you shop for a house. The most significant of our three variables is having financing in place before anything else. Not only does this give you time to compare mortgage offers from several lenders and choose the best terms for your needs, but if you show up at the negotiating table with an offer of financing already in place, you’re giving yourself an edge over the competition.

A good place to start is LendingTree’s marketplace, where you can fill out a short online form and potentially get quotes from several lenders.

Improve your credit score. Credit scores don’t just determine if you will get approved for a mortgage. They also have a big impact on the rate and fees you’ll pay, and that adds up to tens of thousands of dollars on a mortgage. Find out what credit score you need to get a mortgage.

Save a larger down payment. Lenders view the down payment as your “skin in the game” so a larger amount saved increases your financing options. If you do not have a large amount already saved, there are programs in place to assist borrowers. Read about a few here.

Improving your credit score and saving for a larger down payment may take some time. So if you are a buyer with a lower down payment amount or non-prime credit, find a lender to pre-approve your mortgage and level the playing field so you can compete regardless of being in the hottest or most accessible housing markets in America.