PHOTO: PEXELS Brett Sayles
As 2025 unfolds, prospective homebuyers seeking their forever homes may find promising opportunities in several U.S. metropolitan areas identified as housing hotspots by the National Association of Realtors (NAR). Announced in December 2024, NAR’s list highlights regions poised for growth, affordability, and increased housing inventory, making them attractive options for buyers.
Market Outlook for 2025
NAR’s Chief Economist, Lawrence Yun, anticipates a more favorable environment for homebuyers in 2025. He notes that “the worst of the affordability challenges are over as more inventory, stable mortgage rates, and continued job and income growth pave the way for more Americans to achieve homeownership.” Mortgage rates are expected to stabilize around 6%, which NAR considers the “new normal,” and home prices are projected to increase modestly by approximately 2% per sale. Additionally, NAR forecasts around 4.5 million existing-home sales nationwide in 2025.
Top 10 Housing Hotspots for 2025
NAR’s analysis considered various economic, demographic, and housing factors to identify the following top 10 housing hotspots for 2025:
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Boston-Cambridge-Newton, Massachusetts-New Hampshire: Despite an average home price of $694,494, well above the national median, this area is expected to benefit from stabilizing mortgage rates, potentially leading to increased inventory as more homeowners consider selling.
Various properties in the Boston metro area are in Newton, Massachusetts, and they are pricey compared to other US homes
- Charlotte-Concord-Gastonia, North Carolina-South Carolina: Known for its affordable housing, with 43% of homes priced below $324,000, and significant job growth over the past five years, making it appealing to first-time buyers and young families.
The average cost of a house in Grand Rapids, Michigan, is currently $271,960
Grand Rapids-Kentwood, Michigan: With an average home price of $271,960, this area offers affordability and is expected to see more listings as mortgage rates stabilize, reducing the “lock-in effect” among homeowners.
The average cost of a house in Grand Rapids, Michigan, is currently $271,960
Greenville-Anderson, South Carolina: Featuring an average home price of $307,315 and a substantial inventory of starter homes, Greenville is attractive to first-time buyers. The area’s lower-than-average mortgage rates further enhance its appeal.
The Greenville, South Carolina, housing market average is $307,315 – a 2.6 percent increase compared to this time last year
Hartford-East Hartford-Middletown, Connecticut: Offering some of the lowest average home prices among the hotspots, with Hartford at $178,696, and favorable mortgage rates around 6.5%, enhancing affordability for buyers.
Hartford is one of three cities in Connecticut featured on Realtor.com’s Hottest Markets list for October 2024
Indianapolis-Carmel-Anderson, Indiana: Approximately 42% of the housing stock is priced below $236,000, with an average home price of $223,261, making it an affordable option for many buyers. The area is also expected to see increased inventory as mortgage rates stabilize.
About 42 percent of Indianapolis’ housing stock is less than $236,000
Kansas City, Missouri-Kansas: With an average home price of $233,826, this area offers affordability and is expected to attract millennial buyers. Lower average mortgage rates and fewer locked-in homeowners may lead to increased inventory.
The average home cost for a property in Kansas City, Missouri, is $233,826
Knoxville, Tennessee: Known for its affordable housing market, with an average home value of $350,614, and a significant percentage of sales under listing price, making it appealing to buyers seeking value.
Knoxville, Tennessee, is known for its affordable housing market and its average home value is $350,614
Phoenix-Mesa-Chandler, Arizona: With an average home value of $414,977, this area offers a lower cost of living and job growth compared to other western U.S. regions, attracting buyers from higher-priced markets.
Phoenix Arizona’s average home value is $414,977, which is less than $20,000 away from meeting the national average
San Antonio-New Braunfels, Texas: Featuring an average housing price of $250,834, a decrease compared to the previous year, and a substantial sales inventory, this area presents opportunities for buyers seeking affordability in a growing market.
The average housing price in San Antonio, Texas, is $250,834 – a 2.8 percent decrease compared to this time last year
Key Factors Influencing These Markets
NAR identified several factors contributing to the potential growth and attractiveness of these markets:
- Fewer Locked-In Homeowners: Areas with fewer homeowners holding ultra-low mortgage rates are likely to see more properties listed, increasing inventory and offering more opportunities for buyers.
- Lower Average Mortgage Rates: Regions with mortgage rates below the national average enable more buyers to qualify for mortgages, boosting housing demand and market activity.
- Job Growth: Areas experiencing faster job growth provide economic stability and income increases, key factors for home affordability and stimulating housing demand.
- Millennial Affordability: Markets where more millennials can afford homes are likely to see increased demand, especially for entry-level and starter homes, driving local market activity.
- Net Migration: Regions with strong net migration rates experience increased demand for housing, as new residents require accommodations, boosting market activity and potentially driving up home prices if supply doesn’t keep pace.
SOURCE: THE DAILY MAIL