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Buying a home is neither easy nor cheap, especially in today’s market.
But while it’s too early to tell whether next year’s housing market will be more favorable to buyers or sellers, a new report from the National Association of Realtors suggests that some areas are more likely to be affected than others. A favorable market environment is expected.
NAR has identified the top 10 metro areas as “Housing Hotspots” in 2025 based on a variety of economic, demographic, and housing factors.
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“Key factors common to the top-performing markets in 2025 include affordable inventory availability and an increased likelihood of unlocking low mortgage rates,” said NAR Chief Economist Lawrence Yun. , increased income growth among young people, and net migration to certain metropolitan areas.” Senior Vice President for Research said in a statement.
Top 10 “Residential Hot Spots”
“2025 is expected to be a year of even more opportunities” for both homebuyers and sellers, said Nadia Evangelou, senior economist and research director at NAR.
Four of NAR’s 10 “hot spots” are in the South, but unlike the others on the list, none are in Florida. Three of the hotspots on the list are in the Midwest.
The complete list of NARs is:
Boston – Cambridge – Newton, Massachusetts – New Hampshire Charlotte – Concord – Gastonia, North Carolina – Grand Rapids, South Carolina – Kentwood, Michigan – Greenville – Anderson, Hartford, South Carolina – East – Hartford – Middletown, Indianapolis, CT – Carmel-Anderson, Kansas City, Indiana, Missouri-Kansas Knoxville, Phoenix, Tennessee-Mesa-Chandler, Arizona-San Antonio-New Braunfels, Texas
NAR does not rank hotspots, but the report says the South Carolina metropolitan area of Greenville and Anderson stands out.
Evangelou said factors such as a positive financing environment, strong migration growth, affordability for first-time buyers, strong job creation and rising home values set the region apart. Approximately 42% of the properties in this area are starter homes.
“Unprecedented times”
Jacob Channell, senior economist at LendingTree, notes that while “many of these sectors have grown in recent years,” “we could be entering some pretty unprecedented times from 2025 onwards.” He said that it is important to keep
President-elect Donald Trump has been vocal about not only ending the Fannie Mae and Freddie Mac conservatorships, but also enacting measures such as mass deportations and tariffs on all imported goods.
If enacted, ideas like this could have a domino effect on housing affordability. Immigrants make up about one-third, or 32.5%, of construction workers, according to an analysis of 2023 Census data by the National Association of Home Builders.
Changes in immigration policy may affect the workforce in this sector. What’s more, the labor shortage could lead to higher wages, which could be passed on to buyers through higher home prices, experts say.
