Leading the Charge: 10 Housing Hotspots for 2025

At the National Association of REALTORS®' Real Estate Forecast Summit, economists presented their outlook for 2025, predicting a recovery in the housing market after a slow 2024. The forecast includes a modest 2% increase in home prices, along with higher listings and sales, providing new opportunities for homebuyers grappling with high prices and limited inventory.

Key factors driving the recovery include increased housing affordability, favorable migration trends, and growing income levels, particularly among younger adults. According to NAR Chief Economist Lawrence Yun, the top-performing markets in 2025 will benefit from more available inventory at affordable price points, an easing of mortgage rates, and strong local economies.

Among the cities set to lead the rebound is Charlotte, North Carolina, where job growth, a booming population, and a high proportion of affordable starter homes are attracting first-time buyers. Similarly, Knoxville, Tennessee, has become a hotspot due to a surge in new residents and rapidly appreciating home values.

NAR identified the following 10 cities as housing hotspots for 2025 (listed alphabetically):

• Boston-Cambridge-Newton, Mass.-N.H.

• Charlotte-Concord-Gastonia, N.C.-S.C.

• Grand Rapids-Kentwood, Mich.

• Greenville-Anderson, S.C.

• Hartford-East Hartford-Middletown, Conn.

• Indianapolis-Carmel-Anderson, Ind.

• Kansas City, Mo.-Kan.

• Knoxville, Tenn.

• Phoenix-Mesa-Chandler, Ariz.

• San Antonio-New Braunfels, Texas

  
  

Several factors are expected to influence housing activity in these cities, including:

• Homeownership Turnover: With fewer homeowners locked into ultra-low mortgage rates, areas with greater turnover are likely to see more buying activity, especially as mortgage rates stabilize.

• Job Growth: Economic expansion often drives housing demand, boosting buyer confidence and home sales.

• Net Migration: Cities attracting newcomers are poised for price growth as housing demand outpaces supply.

• Demographic Shifts: As more households enter the prime homebuying age (35–40), local markets may see an uptick in demand.

• Long Tenure: Homeowners who have stayed in their homes for longer periods may be more likely to sell, increasing inventory.

• Affordable Starter Homes: Markets with a higher share of starter homes, typically priced below 85% of the area’s median, may see greater accessibility for younger or lower-income buyers.

• Equity Gains: Rising home values often correlate with stronger local markets, creating opportunities for investment and attracting buyers.

• Mortgage Affordability: Areas with lower average mortgage rates may offer a more affordable entry point for buyers.

• Secure Renters: Financially stable renters who are ready to buy could further boost demand as prices and rates stabilize.

  
  

NAR’s list of top 10 markets for 2025 reflects these trends, with these cities outperforming national averages across various economic, demographic, and housing metrics.