Many cities that count as vacation destinations with plenty of outdoor activities to offer, like North Port-Sarasota-Bradenton, topped The Wall Street Journal/Realtor.com Emerging Housing Markets Index in the second quarter of 2022. The report looked at the largest 300 metropolitan areas in the U.S. The North Port-Sarasota-Bradenton metro area came in second on the list last year.

This time around, Rapid City, South Dakota, topped the list, followed by Santa Cruz-Watsonville, VA, while North Port-Sarasota-Bradenton came in at No. 3. Other Florida metro areas in the top 20 list are Naples-Immokalee-Marco Island at No. 5, Cape Coral-Fort Myers at No. 15. Tampa-St. Petersburg-Clearwater is second to last.

With growing housing demand and insufficient supply, median list prices hit a new record high in March, both nationally, at $405,000 and locally, reaching $500,000. 

In the face of the rising costs of living, and a sudden surge in mortgage interest rates, affordability was a major driver for home shoppers. The typical 30-year loan rate went from 3.1 percent at the end of 2021 to 5 percent by early April, adding hundreds of dollars to the typical monthly mortgage payment, leading to a scramble to buy before rates continue to ascend.

Out-of-state buyers aren’t dampened by soaring housing costs, though. Based on the report, several cities in the top 20 list experienced a significant share of out-of-state homebuyers, with markets including Sarasota seeing its share of out-of-state online visitors reach 50 percent and higher.

As interest rates compound the high cost of living in more expensive cities, interest in relatively affordable markets like Sarasota continues driving home-buying activity.

The Wall Street Journal/Realtor.com Emerging Housing Markets Index identifies the top metro areas for homebuyers seeking an appreciating housing market and appealing lifestyle amenities. Read the full report here.