Sellers looking to off-load properties in the Midwest, Northeast, and South in the next 12 months may be in for a good year, according to Zillow. The real estate website recently released its forecast predicting the hottest housing markets for 2025—and most of the top 10 cities are in these regions.
“These hot housing markets are where demand for housing is not matched by supply,” explains Kara Ng, a senior economist at Zillow. This means competition is often fierce among buyers, and homes sell quickly at or above asking price. To calculate its rankings, Zillow considered “forecasted home value growth, recent housing market velocity and projected changes in the labor market, home construction activity, and number of homeowner households.” These were the cities anticipated to warm up in 2025.
Zillow’s Hottest Housing Markets for 2025
- Buffalo, New York
- Indianapolis, Indiana
- Providence, Rhode Island
- Hartford, Connecticut
- Philadelphia, Pennsylvania
- St. Louis, Missouri
- Charlotte, North Carolina
- Kansas City, Missouri
- Richmond, Virginia
- Salt Lake City, Utah
A closer look at the 10 hottest housing markets
For the second year in a row, Buffalo, New York ranked first on Zillow’s list. “Buffalo is expected to be the hottest market for the second consecutive year because it offers relative affordability, and housing supply there is limited,” Ng says. “That’s expected to fuel continued strong competition among buyers.”
Further, the city has a strong job market, which often means new residents to drive up demand. “Buffalo has the most new jobs per new home permitted—a key component that’s kept Buffalo at the top of the list for two years running, along with expected appreciation,” the report explains.
Indianapolis, which ranked second on the list, is expected to see houses appreciating faster than the typical US home. In fact, Zillow forecasts that home values will rise by 3.4% in the Midwest city in 2025. “This signals a healthy demand for homes, driven by relative affordability and job growth,” Ng says. “While home prices are expected to rise, the market remains affordable compared to other major metro areas, and that’s a big reason why it’s so attractive to buyers.”
Demand in cities like Providence, Hartford, and Philadelphia is driven by relative affordability compared to nearby metros, such New York City or Boston. “These markets offer job opportunities and all the amenities of big-city living at a more affordable price,” Ng adds. “Plus, hybrid or remote employees may find they can occasionally manage an extra-long commute when they need to be in the office. That makes these markets very attractive to first-time home buyers who want to put down roots in the Northeast and find they can have a similar quality of life at a lower cost.”
What to expect in hot housing markets
The metro cities will largely be sellers’ markets this year. “If they hire a great agent who can help price and market their listing correctly, sellers can expect to command a strong price and sell their home quickly,” Ng says. However, most will likely re-enter the market as buyers and will face heightened competition, so it will be important to time a sale with the purchase of a new residence well.
