Affordable markets with relatively few homes for sale will likely bustle with housing activity in 2025, according to real estate website Zillow.
Overall, home shoppers should find a more hospitable market than they have in the recent past. In a report on the state of housing in America, Skylar Olsen, Zillow chief economist, says:
“Shoppers nationwide should see more options for sale than in recent years, along with slow and steady price growth. That’s the good news. But both buyers and sellers should expect unpredictable mortgage rates.”
So which markets will fare best?
Zillow looked at four factors to determine the biggest winners among the nation’s 50 most populous metros. Those factors are:
- Local home value growth
- How quickly homes are selling
- Job growth per new home permitted
- Expected growth in owner-occupied households
With that in mind, the following places are projected to be the hottest housing markets of 2025.
Buffalo, NY
This metropolitan area’s rank for 2025: No. 1
How its rank has changed since 2024: Same as last year
For the second straight year, Buffalo is the hottest housing market. Zillow says it is the first time any city has racked up back-to-back wins on this list.
Olsen says employment in Buffalo is growing “far faster” than homes are being built. Buffalo has the most new jobs per new home permitted — a measure of expected home demand — of any city on this list.
Indianapolis, IN
This metropolitan area’s rank for 2025: No. 2
How its rank has changed since 2024: Up two spots
Zillow notes that lower-than-average costs for both homes for sale and rent are behind the growing demand for homes in Indianapolis and other cities on this list.
Indianapolis is expected to see home values rise a solid 3.4% in 2025.
Providence, RI
This metropolitan area’s rank for 2025: No. 3
How its rank has changed since 2024: Up two spots
Cities such as Providence benefit from the fact that they are much more affordable than nearby metropolises such as New York and Boston, Zillow says.
Still, homes here have a median value of $484,019, more than double the amount of the median price in cities such as Cleveland, Oklahoma City and Pittsburgh.
Hartford, CT
This metropolitan area’s rank for 2025: No. 4
How its rank has changed since 2024: Up 15 spots
Home values are expected to appreciate by 4.2% in Hartford during 2025, marking the largest prospective gain for any city on this list.
Inventory for sale has tumbled by 68.6% from the averages of 2018-2019, the largest slide among cities in the top 25.
Philadelphia, PA
This metropolitan area’s rank for 2025: No. 5
How its rank has changed since 2024: Up six spots
Philadelphia is the largest metro to make the top 10. Homes in this major metro sell for a surprisingly reasonable $362,744.
The city ranks second to Buffalo among all the metros on this list when it comes to jobs per new home permitted.
St. Louis, MO
This metropolitan area’s rank for 2025: No. 6
How its rank has changed since 2024: Up nine spots
St. Louis is another city that has become attractive due to lower rent and homebuying costs, Zillow says.
Homes in this Missouri city sell for a modest median of $250,141.
Charlotte, NC
This metropolitan area’s rank for 2025: No. 7
How its rank has changed since 2024: Same as last year
Like Buffalo, Charlotte keeps the same place it had in last year’s rankings.
Jobs per new home permitted is actually negative in the Queen City, at -0.5. Still, home values are expected to grow by a respectable 3.2%.
Kansas City, MO
This metropolitan area’s rank for 2025: No. 8
How its rank has changed since 2024: Up 10 spots
As with its neighbor St. Louis, home shoppers looking for bargain prices are discovering Kansas City.
Homes remain affordable in the city, at a median of $299,118, although inventory is down by 36% compared to 2018-2019 averages.
Richmond, VA
This metropolitan area’s rank for 2025: No. 9
How its rank has changed since 2024: Up 11 spots
Richmond’s jump of 11 spots is the third-highest among cities in the top 10 of this list.
The median home value — which currently sits at $368,957 — is expected to rise 2.9% this year.
Salt Lake City, UT
This metropolitan area’s rank for 2025: No. 10
How its rank has changed since 2024: Up 18 spots
Salt Lake City is the only city in the West to make the top 10 this year. Last year, the West was shut out entirely.
Inventory levels are only down 4.8% from the 2018-2019 averages, but you better have deep pockets if you move here: The median home value of $543,324 is the highest for any city in the top 10.
The rest of the top 25
Here are the rest of the cities in the top 25:
- Cincinnati, OH: No. 11 for 2025 (down nine spots since 2024)
- Columbus, OH: No. 12 (down nine spots)
- Virginia Beach, VA: No. 13 (up 23 spots)
- Cleveland, OH: No. 14 (down six spots)
- Miami, FL: No. 15 (up 10 spots)
- Boston, MA: No. 16 (up 10 spots)
- Oklahoma City, OK: No. 17 (up 21 spots)
- Detroit, MI: No. 18 (up six spots)
- San Diego, CA: No. 19 (up 10 spots)
- Birmingham, AL: No. 20 (up 21 spots)
- Raleigh, NC: No. 21 (down four spots)
- Riverside, CA: No. 22 (up 12 spots)
- Orlando, FL: No. 23 (down 14 spots)
- Atlanta, GA: No. 24 (down 18 spots)
- Pittsburgh, PA: No. 25 (down nine spots)
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