Head to the Midwest or the East Coast for some of the biggest hotspots to cash in on a rental investment this year, according to a new analysis from TurboTenant, a property management tool. Overall, 31 cities from 20 states are featured in the report, which names the cities for the best rental investments in 2020. New York and Ohio tied for the most cities making the list, at three each.

“When identifying the top 31 cities, we looked for a positive ROI and high growth numbers across all data points,” says Sarnen Steinbarth, founder and CEO of TurboTenant. Researchers also factored in employment and population growth, increase in home values, and rental yield when identifying the top places for rental investments. Here are the top 10 metros to make the list:

Reading, Pa.

• Increase in home values: 11.1%
• Median sales price: $140,000
• Average rent (for a two-bedroom): $957

District Heights, Md.

• Increase in home values: 0.4%
• Median sales price: $252,000
• Average rent: $1,408

Allentown, Pa.

• Increase in home values: 19%
• Median sales price: $145,000
• Average rent: $1,063

East Orange, N.J.

• Increase in home values: 10%
• Median sales price: $273,000
• Average rent: $1,534

Nashua, N.H.

• Increase in home values: 4.5%
• Median sales price: $283,000
• Average rent: $1,524

Cincinnati

• Increase in home values: 3.1%
• Median sales price: $163,000
• Average rent: $1,048

Paterson, N.J.

• Increase in home values: 11.9%
• Median sales price: $268,000
• Average rent: $1,614

New Castle, Del.

• Increase in home values: 8%
• Median sales price: $188,000
• Average rent: $1,884

Rochester, N.Y.

• Increase in home values: 5.6%
• Median sales price: $136,000
• Average rent: $1,126

Hyattsville, Md.

• Increase in home values: 0.4%
• Median sales price: $279,000
• Average rent: $1,982

Homebuyer demand hit its highest level in 11 years, as January continues to shape up to be a hot month for the housing market. Weekly mortgage applications jumped 30% for the week ending Jan. 10, a sign that home buyers are emerging, the Mortgage Bankers Association’s seasonally adjusted index shows.

“The mortgage market saw a strong start to 2020,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA. “Applications increased across the board. Lower rates provided a larger incentive for borrowers to act.”

Indeed, the average 30-year fixed-rate mortgage decreased to its lowest level since September, averaging 3.87%, the MBA reports.

Applications for home purchases, a gauge of home buying activity, jumped 16% last week, reaching the highest level since 2009.

Refinancing applications saw the biggest jump last week among those applying for home loans, a 43% increase over last week. Refinance applications are 109% higher than a year ago. “Refinances increased for both conventional and government loans, as lower rates provided a larger incentive for borrowers to act,” Kan says.

A downsizing trend is occurring in new-home construction, with the declining number of bedrooms in newly built homes a solid sign of the change. The U.S. Census Bureau’s survey of construction data confirms that the number of bedrooms in the typical newly constructed single-family home is dropping.

The number of new single-family homes that were started with four bedrooms or more dropped from 44.8% in 2017 to 43.5% in 2018, continuing a trend that has been occurring since 2015, the National Association of Home Builders notes on its Eye on Housing blog.

The declining trend in the number of bedrooms has followed an overall trend of a decrease in new single-family home sizes, NAHB notes.

“These developments are linked to changes in preferences among home buyers,” the NAHB notes about the data on its blog. “With more millennials becoming prepared to buy their first home, the starter home share will rise, which means smaller homes and slightly fewer bedrooms.”

In 2018, the number of single-family homes that had been started with three bedrooms was the highest of all categories at 45%. Homes with four bedrooms followed at 34%, homes with two bedrooms comprised 11% of new builds, and homes with five bedrooms or more was at 9%.