An Illinois city is making a name for itself in a positive way and giving residents something to boast about.

Rockford has jumped to the top of the Realtor.com® Hottest Housing Markets for the first time ever, shaking up the rankings to ring in the new year.

Rockford ranked No. 1 on the list in December, edging out perennial favorite Manchester, NH, which has claimed the top spot a whopping 31 times since the rankings began in 2017.

In Rockford, with a median list price of just $242,000 last month, homes are moving quickly, typically spending just 43 days on the market compared with the national median of 70.

“Rockford’s hotness means that high demand is met with low inventory as buyers claim available homes,” Realtor.com senior economic analyst Hannah Jones writes in the new report. “This affordable area has seen sustained demand this year as mortgage rates and home prices deter buyers from searching in higher-priced areas.”

Listings in Rockford attracted nearly three times as many viewers on Realtor.com last month than the national average, indicating the high level of buyer interest in homes in the northern Illinois city.

Rockford, located about 90 miles northwest of Chicago and 90 miles southwest of Milwaukee, topped last year’s Wall Street Journal/Realtor.com list of housing markets to watch, which identifies the strongest housing markets in the nation with good potential for future growth.

The area is home to several hospital systems, aerospace companies, and manufacturing jobs. Still, Rockford’s unemployment rate stood at 8.1% as of November, nearly double the national average.

The Northeast and Midwest continue to dominate

For the 15th consecutive month, every market on the Hottest Housing Markets list hailed from the Northeast or Midwest.

In December, the two regions split the list, each claiming 10 spots.

“The Midwest and Northeast have reigned supreme as homes to most of the country’s hottest markets since mid-2022 when mortgage rates picked up steam,” says Jones.

All but five markets on December’s list also made the cut in November. The newcomers were Norwich, CN, Topeka, KS, Dayton, OH, Harrisburg, PA, and Peoria, IL, which all jumped into the top 20 from within the top 35 markets last month.

But as Jones points out, the lack of geographic diversity on the list over time highlights the relative stagnation of the national market, which just completed its second straight year of the lowest home sales volume since 1995.

High demand drives price growth in the hottest markets

Nationally, home prices fell 1.8% in December compared with a year earlier, but on average, they continued to grow in the hottest markets, rising 2.7% in December from a year ago across cities on the list.

List prices climbed annually in 14 of the 20 cities on the latest hottest markets list, as strong demand in those cities continued to support price growth.

In Rockford, the median list price surged 21% in December from a year earlier, the largest gain among the 20 markets on the list. Behind Rockford, the markets on the list with the largest annual price gains were Harrisburg, PA (9%), and Milwaukee (7%).

Southern markets see the biggest decline in hotness

The five cities that dropped out of the top 20 hottest markets in December were in the bottom five slots the prior month and didn’t fall far in dropping off the list.

They were Erie, PA, New Haven, CT, Cleveland, Allentown, PA, and Lafayette, IN.

The cities that saw the biggest annual declines in hotness ranking were mostly Southern metros, led by Nashville, TN, which plunged 97 spots on the list compared with a year ago.

That was followed by Rocky Mount, NC, and Orlando, FL, which both dropped 92 spots on the hotness list.