PREDICTION: Housing Hot Spots in 2025

2 minutes read

The National Association of Realtors® (NAR) has unveiled its list of the top 10 housing markets to watch in 2025, selected based on key economic, demographic, and housing indicators. The South leads with four standout markets, followed by three in the Midwest, and individual cities in the Northeast and West.

The Top 10 Housing Hot Spots for 2025

Carolinas: North Carolina made the top 10 along with South Carolina thanks to the Charlotte/Concord area making the list. South Carolina also made the list with the Greenville area.

Round out the top 10:

  • Knoxville, Tennessee
  • Kansas City, Missouri-Kansas
  • San Antonio-New Braunfels, Texas:
  • Phoenix-Mesa-Chandler, Arizona
  • Boston-Cambridge-Newton, Massachusetts-New Hampshire
  • Grand Rapids-Kentwood, Michigan
  • Hartford-East Hartford-Middletown, Connecticut
  • Indianapolis-Carmel-Anderson, Indiana

What They’re Saying: NAR’s Chief Economist, Lawrence Yun, forecasts a gradual improvement in the housing market, with key factors pointing to stabilization. Mortgage rates are expected to stabilize around 6% in 2025, creating a “new normal.”

  • “Home buyers will have more success next year,” said 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.”

Slightly More Sales: NAR projects existing-home sales will reach 4.5 million in 2025, signaling a resurgence in activity. The market is unlikely to return to pre-pandemic norms, but stabilization in rates and steady inventory growth will improve conditions for buyers.

  • With more homes entering the market, buyers will find greater opportunities and less competition. Strong job and income growth will continue to support housing demand.

Bottom Line: The housing market in 2025 is poised for improvement, but the pace will be measured. For many, the conditions of higher interest rates and tempered affordability could represent the “new normal.”