How we rank America's boom towns and declining cities.
The Boom Town Index is a composite score from 0 to 100 that identifies counties where economic growth is outpacing housing prices — the conditions that historically precede real estate booms.
The core thesis: when a local economy is growing faster than housing prices are rising, housing is undervalued relative to economic output. That gap is the opportunity signal.
A score of 80 means the county ranks higher than 80% of all U.S. counties on our composite. It does NOT mean the county is "80% good" — it's a relative ranking.
BTI = EM × 0.65 + max(EM − HV, 0) × 0.25 + Affordability × 0.10
Average percentile rank across 4 signals measuring local economic health:
Year-over-year change in real Gross Domestic Product (chained 2017 dollars). Source: Bureau of Economic Analysis (BEA) County GDP. This is the most direct measure of total economic output — it captures all industries, services, and government activity within county borders.
Year-over-year change in county population. Source: U.S. Census Bureau American Community Survey. A leading indicator — people were moving to Denver and Austin years before home prices took off. Growing counties create housing demand; shrinking ones lose it.
Year-over-year change in median household income. Source: Census ACS. Measures resident purchasing power — the financial capacity of the people who actually live there and buy homes. Distinct from GDP because it's residence-based, capturing commuters and remote workers.
Average of homeowner and rental vacancy rates, inverted (lower vacancy = higher score). Source: Census ACS. Tight vacancy means demand exceeds supply — the fundamental precondition for rent growth and price appreciation.
The “P/E ratio” for housing — a single metric that measures whether homes are cheap or expensive relative to the local economy:
Median home value divided by county GDP per capita (BEA real GDP / population). A low ratio means housing is cheap relative to local economic output — undervalued. A high ratio means housing is expensive relative to the economy — overvalued.
The typical U.S. county has a ratio around 4–6x. Counties like Pinal AZ (9.1x) are penalized for overvaluation despite strong GDP growth. Counties like Grundy IL (2.7x) are rewarded because housing hasn't yet priced in their economic output.
This replaced our earlier “Price Momentum” approach (12-month ZHVI/ZORI changes), which only captured recent price trends and failed to identify overextended markets where prices had already run up over multiple years.
Ratio of median household income to median home value. Source: Census ACS. Peer-group ranked — counties are compared against others of similar population size (500K+, 100K-500K, <100K) so that expensive metros aren't unfairly penalized relative to rural counties. Provides starting-position context at modest weight.
Most "best places to invest" rankings use arbitrary weighted averages of signals thrown into a pot. The Boom Town Index is built on a specific economic thesis:
When local economic output grows faster than housing prices, housing is undervalued.
The formula makes Economic Momentum dominant (65%) so that declining economies can never score high regardless of housing prices. The gap bonus (25%) directly rewards the thesis: when EM exceeds HV, the economy is outpacing housing costs. The Housing Valuation ratio acts as a “P/E ratio” for real estate — just as investors avoid stocks with high P/E ratios unless growth justifies them, we penalize counties where home prices are high relative to GDP per capita. The affordability modifier (10%) adds peer-group context without dominating.
Each county gets three projections:
The scenario spread (difference between Accelerating and Cooling) tells you how uncertain a county's trajectory is. Tight spread = reliable. Wide spread = speculative.
| Source | Provider | Frequency |
|---|---|---|
| County GDP (Real, Chained 2017$) | Bureau of Economic Analysis (BEA CAGDP9) | Annual |
| Income, Housing, Population, Vacancy | U.S. Census Bureau (ACS 5-Year) | Annual |
| Population Estimates | U.S. Census Bureau (PEP) | Annual |
| Home Value & Rent Trends | Zillow Research (ZHVI, ZORI) | Monthly |
All data is publicly available from U.S. government agencies and Zillow Research. We do not use proprietary or paywalled data sources. BEA GDP data through 2022.