W
ASHINGTON (December 12, 2024) - The National Association of Realtors has identified 10 top housing hot spots for 2025 based on economic, demographic, and housing factors. According to NAR's report, Housing Hot Spots for 2025: Top Markets Amid Stabilizing Rates, these areas are expected to perform well due to favorable financing environments and strong growth in key indicators.

    The top markets include 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; and San Antonio-New Braunfels, Texas.

    NAR Chief Economist Lawrence Yun notes that common factors among these top-performing markets include available inventory at affordable price points, a better chance of unlocking low mortgage rates, higher income growth for young adults, and net migration into specific metro areas. The association expects the Federal Reserve to maintain a gradual approach to easing monetary policy in 2025, leading to stabilized borrowing costs and mortgage rates near 6%.

    As a result, NAR forecasts 4.5 million existing-home sales in 2025, with home prices increasing at a slower pace of around 2% compared to previous years, reaching a median existing-home price of $410,700. The national housing shortage is expected to improve due to new construction projects and homeowners listing their properties, encouraged by stabilizing mortgage rates.

    "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."

    NAR identified these top markets by analyzing 10 key economic, demographic, and housing factors, including share of locked-in homeowners, average mortgage rate, job growth, and home price appreciation.