Affordability will be the primary factor driving the housing market this year, with moderately priced cities expected to turn into the hottest markets, according to a new report from Zillow.

After buyers flocked to the Sun Belt over the last three years, helping drive prices up in parts of the South and West to record highs, they now are looking northward to regions where home values increased more gradually.

Younger consumers, who frequently place homeownership high on their list of financial goals, will influence trends, and they are putting a premium on affordability and career opportunity, said Anushna Prakash, data scientist for Zillow Economic Research. 

"Housing markets are healthiest where affordable home prices and strong employment are giving young hopefuls a real shot at buying and starting to build equity," she said in a press release.   

A prior Zillow study indicated households choosing to relocate were heading to regions with units that were typically $7,500 more affordable than the areas they exited.

Included among the the list of Zillow's hottest 2024 markets are cities in the Midwest and Northeast, where growth of jobs and new home permits point to likely demand that, in combination, prevents inventory and values from shrinking or surging too quickly.

But sunnier climes have not lost their appeal either, with Southern metropolises still likely to see elevated sales activity. 

"I'm cautiously optimistic that the housing market will get back on stable footing in 2024 — we shouldn't see the massive price spikes of the early pandemic or fast-rising mortgage rates of recent years," Prakash added.

The typical property nationwide is being sold for $347,415 and comes with a monthly payment of $2,514 based on 5% down, Zillow said. Homes are staying on the market for 21 days. Meanwhile, the typical rent in the U.S. comes in at $1,982. Zillow determines typical values by averaging the middle third of markets after cutting off the top and bottom 5%.

Following are the 10 hottest markets for 2024 based on the real estate brokerage's analysis.