10 Housing Markets to Watch in 2025
Looking to buy a home in 2025? You might want to check out these sizzling-hot housing markets identified by the National Association of Realtors (NAR)! Based on a combination of economic factors, demographics, and housing trends, NAR has pinpointed 10 metro areas poised for strong performance in the coming year.
What makes these markets so special? According to NAR Chief Economist Lawrence Yun, these hot spots share key characteristics:
- Affordable Inventory: Homes available at reasonable price points.
- Favorable Financing: A better chance of securing lower mortgage rates.
- Strong Economic Growth: Higher income growth, especially for young adults.
- Population Influx: Net migration into these metro areas.
The Top 10 Housing Hot Spots for 2025
- Boston-Cambridge-Newton, Massachusetts-New Hampshire
- Charlotte-Concord-Gastonia, North Carolina-South Carolina
- Grand Rapids-Kentwood, Michigan
- Greenville-Anderson, South Carolina
- Hartford-East-Hartford-Middletown, Connecticut
- Indianapolis-Carmel-Anderson, Indiana
- Kansas City, Missouri-Kansas
- Knoxville, Tennessee
- Phoenix-Mesa-Chandler, Arizona
- San Antonio-New Braunfels, Texas
Why These Markets Are Heating Up:
These areas are expected to outperform the national average in several key indicators, offering a more favorable environment for both buyers and sellers. A key factor is the anticipated stabilization of mortgage rates near 6% in 2025. This "new normal," while higher than the pandemic lows, is still below the long-term average and is expected to bring more buyers back into the market.
What Else to Expect in 2025:
- More Homes for Sale: Inventory levels are improving, with a projected increase thanks to both new construction and existing homeowners deciding to sell. This means more choices for buyers!
- Slower Price Growth: While home prices are still expected to rise, the pace will be much slower, around 2%, with the median existing-home price reaching approximately $410,700.
- Increased Construction: New home construction is expected to pick up, reaching nearly 1.45 million units annually. This is good news for buyers seeking newly built homes.
The Bottom Line for Buyers:
"Home buyers will have more success next year," says Yun. "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."
If you're considering buying a home in 2025, keep an eye on these hot spots! With more inventory, stabilizing mortgage rates, and continued economic growth, these markets offer promising opportunities for potential homeowners.
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