The housing market may be sluggish overall, but there are still some ZIP codes where competition is fierce and homes are selling well above listing price.

The most desirable ZIP code in the nation right now is 01960, according to Realtor.com's 2026 Hottest ZIP Codes report. That ZIP code belongs to Peabody, Massachusetts, a town located near Boston.

Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one

Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here's what it is and 3 simple steps to fix it ASAP

Millionaires under 43 hold only 25% of their wealth in stocks. Here's where their money is actually going

Cameron and Hannah Zirpolo, for example, spent five months trying to find a home in Peabody. "The housing market is not for the weak," Cameron told MarketWatch.

After going to 15 open houses between April and June and being outbid six times on offers, they realized they were going to have to step it up. "We needed to go at least $50,000 over asking to even have a chance," Cameron said.

The Zirpolos ultimately found a home for $751,000 after five months of looking, noting "there is nothing not to love" about their choice after a challenging journey.

This is the first year Peabody earned the distinction of "hottest" ZIP code, though it ranked in the report's top 10 in 2018 and 2021. This year, ZIP code 07042 (Montclair, New Jersey) came in at No. 2, while 08080 (Sewell, New Jersey) took third place.

During the first half of this year, homes in Peabody spent just 20 days on the market, according to Hottest ZIP Codes. That compares to 57 days at a national level.

The median price of a home here isn't cheap: it's around $600,000. And in June, it reached $667,000, according to Realtor.com. However, that was still almost 20% below the Boston metro average.

Peabody is just 20 miles from downtown Boston (with highway access) and close to major employers. "Its mix of livability, relative value and easy commuting distance helped make it one of the year's hottest ZIP codes," according to the report.

In Montclair, which came second in the rankings, homes spent only about 18 days on the market, despite a median listing price of $1,050,000. In Sewell, third in the rankings, homes spent about 25 days on the market, priced at a median of $426,000.

The rankings are based on market demand (measured by unique viewers per property on Realtor.com) and the number of days a listing spends on the market.

Overall, the report found that buyers are "prioritizing space and established character over affordability alone." They're also willing to pay a premium "to live in larger, older homes within reach of a major job center rather than settling for less space closer in."

Aside from Massachusetts and New Jersey, this year's hottest ZIP codes can be found in New York, Connecticut, Pennsylvania, Wisconsin, Illinois and Michigan. Realtor.com points to tighter new-construction pipelines in these regions, which constrains supply.

Read More: Vanguard reveals what's coming for U.S. stocks — and it could be bad news for this group of investors

"Nationally, the typical home sold for about 2.3% below its list price in the first half of 2026 — a sign of a market where sellers are, on average, still conceding ground to close a deal," says the report.

But affordability continues to plague many would-be homebuyers.

As of Aug. 6, mortgage rates averaged 6.69% for a 30-year fixed-rate mortgage, according to Freddie Mac. The same time a year ago, the rate was 6.63%.

At a national level, there still isn't enough supply to meet demand, which means housing prices remain elevated. At the same time, economic uncertainty — combined with diminishing consumer confidence — is weakening demand.

Overall, "high costs are sidelining many would-be buyers and renters, even as new construction slowly chips away at supply shortfalls," according to Daniel McCue, senior research associate at the Harvard Joint Center for Housing Studies, in an overview of the 2026 State of the Nation's Housing report.

Whether you're looking to buy a new or an existing home, the national median price is still over $400,000. "Existing home prices are up 54 percent nationwide since 2020 and remain nearly 5 times median incomes — far above the standard ratio of 3 that held in the 1990s," according to McCue.

With interest rates above 6%, he says households would need an income of more than $120,000 to afford the monthly payments on a median-priced home ($3,100 per month, as of Q4 2025, compared to $1,700 per month in early 2020).

If you're in the market for a new home, you'll want to get the best mortgage rate possible and put down the largest down payment you can afford — whether your ZIP code is hot or not.

Indeed, across the 10 hottest ZIP codes, "buyers are bringing meaningfully stronger financial profiles to the table than the national norm," according to Hottest ZIP Codes.

The better your credit score, the more likely you'll get a better mortgage rate. To improve your credit score, make on-time payments and keep your credit card utilization rate as low as possible.

You can request your credit report (for free) from the three major credit reporting bureaus: Experian, Equifax and TransUnion.

While mortgage lenders look at your credit score, they also look at your debt-to-income ratio (DTI), which is how much of your monthly income goes toward paying down debt. A general rule of thumb is that a DTI of 36% or less will give you the best mortgage rates.

You might be able to reduce your mortgage rate if you make a larger down payment, since this reduces your loan-to-value (LTV). This percentage (your mortgage amount compared to the appraised value of the property) helps lenders assess risk.

Keep in mind that rates advertised by lenders typically assume you're putting down 20% or more — so, if you don't have a 20% down payment, that rate may be higher for you.

First-time homebuyers may be eligible for financial help. For example, some states offer down payment assistance and tax breaks. You could also explore different types of mortgages (such as FHA loans backed by the Federal Housing Administration, which have lower rates but come with mandatory mortgage insurance).

But if you happen to be looking for a new home in one of the nation's hottest ZIP codes, be prepared to spend more than the listing price.

The tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time. What to do before the window closes

Here's the average income of Americans by age in 2026. Are you keeping up or falling behind?

Robert Kiyosaki says China is 'dumping' the US as America piles on debt. Fortify your riches with 4 key assets

This fund has historically paid 8% or higher for 25 months, with just a $100 minimum to start — 4 ways to grow your cash without touching the stock market

Join 250,000+ readers and get Moneywise's best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

This article originally appeared on Moneywise.com under the title: A town outside of Boston is the hottest ZIP code in the US — you may need $50,000 over asking price to buy a home there

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.