Affordability and job growth are key drivers
of competition
- Competition among buyers never cooled in Buffalo last year, and that heat should keep
smoldering through 2025.
- Hot markets spread from the Northeast, Great Lakes and South
regions into the Midwest and West.
- Virginia Beach jumped farthest up the list from 2024,
leapfrogging over 23 markets.
SEATTLE, Jan. 7, 2025
/PRNewswire/ -- Buffalo, New York,
will be the hottest major housing market in 2025, according to a
new analysis by Zillow®, the first time a market has held the title
in back-to-back years. Relative affordability and few homes for
sale are common threads among what should be the most competitive
markets for buyers this year.
"Construction that keeps pace with an area's growth remains a
crucial piece of keeping homes available and accessible. In chilly
Buffalo, competition among buyers
will remain hot, with employment growing far faster than builders
are adding homes," said Skylar
Olsen, Zillow chief economist. "Shoppers nationwide should
see more options for sale than in recent years, along with slow and
steady price growth. That's the good news. But both buyers and
sellers should expect unpredictable mortgage rates."
This hotness ranking of the nation's 50 most populous metros
takes into account Zillow's forecast for local home value growth
and how quickly homes are selling. It also considers job growth per
new home permitted and expected growth in owner-occupied
households.
Zillow forecast Buffalo to be
the hottest market in 2024, and that prediction proved prescient.
Sellers held a strong advantage in negotiations there throughout
last year, according to Zillow's market heat index.
Buffalo has the most new jobs
per new home permitted — a measure of expected demand. New jobs
often mean new residents, which raises competition and drives up
prices unless builders can match the additional demand.
Although affordability has improved slightly compared to last
year, it's still top of mind for buyers. Lower-than-average home
prices and rent costs in Buffalo
as well as Midwest metros like Indianapolis, St.
Louis and Kansas City have
bolstered demand in these areas, helping push them to the top of
the list.
Relative affordability is a powerful force, too. Nearby
alternatives to expensive Northeastern metros like New York and Boston dominated Zillow's list of the most
popular cities among home shoppers in 2024. Metropolitan areas in
the same vein — Providence,
Hartford and Philadelphia — rank high on this list as
well.
Hartford, Providence, Indianapolis and Charlotte are all among the
top five in Zillow's forecast for home value appreciation in 2025.
Hartford leads the pack with 4.2%
expected growth. But home value growth is set to largely level out
this year — even these standout metros look tame compared to the
double-digit annual appreciation seen in 2021 and 2022.
Rising fastest in the ranks from 2024's hottest markets list is
Virginia Beach, which leapfrogged over 23 markets to the No. 13
spot this year, driven by job growth that has far outpaced new home
permitting. Memphis fell the
farthest by the same token, dropping 30 places, as new home
permitting has eclipsed low job growth.
After the entire western half of the country was shut out of
last year's top 10, Salt Lake City
nudged its way onto this year's list at No. 10. San Diego was the only other Western metro in
the top 20, at No. 19.
Mortgage rates are likely to continue on their bumpy path in
2025, and swings will have a major impact on which homes shoppers
can afford or even qualify for. Zillow Home Loans'
BuyAbilitySM tool tracks rates in real time to show
users which homes fit their budget.
|
2025
Hottest
Markets
Rank
|
Metropolitan
Area
|
Change
in Rank
from
2024
|
Zillow
Home
Value Index
(ZHVI) 2024
|
ZHVI
Year
over
Year
Growth,
2024
|
2025
Home
Value
Growth
Forecast
|
Jobs per
New
Home
Permitted
|
Change in
Inventory
Versus
2018–2019
Averages
|
|
1
|
Buffalo, NY
|
0
|
$260,537
|
5.7 %
|
2.8 %
|
2.0
|
-46.1 %
|
|
2
|
Indianapolis,
IN
|
2
|
$275,639
|
3.6 %
|
3.4 %
|
0.5
|
-16.1 %
|
|
3
|
Providence,
RI
|
2
|
$484,019
|
6.7 %
|
3.7 %
|
1.3
|
-62 %
|
|
4
|
Hartford, CT
|
15
|
$363,298
|
6.5 %
|
4.2 %
|
1.1
|
-68.6 %
|
|
5
|
Philadelphia,
PA
|
6
|
$362,744
|
4.6 %
|
2.6 %
|
1.5
|
-46 %
|
|
6
|
St. Louis,
MO
|
9
|
$250,141
|
4.2 %
|
1.9 %
|
1.3
|
-43.8 %
|
|
7
|
Charlotte,
NC
|
0
|
$377,450
|
1.6 %
|
3.2 %
|
-0.5
|
17.5 %
|
|
8
|
Kansas City,
MO
|
10
|
$299,118
|
3.8 %
|
2.7 %
|
0.2
|
-36 %
|
|
9
|
Richmond, VA
|
11
|
$368,957
|
4.1 %
|
2.9 %
|
-0.1
|
-43.3 %
|
|
10
|
Salt Lake City,
UT
|
18
|
$543,324
|
2.8 %
|
2.3 %
|
0.5
|
-4.8 %
|
|
11
|
Cincinnati,
OH
|
-9
|
$281,887
|
4.6 %
|
2.9 %
|
-0.2
|
-32.8 %
|
|
12
|
Columbus, OH
|
-9
|
$310,746
|
3.8 %
|
3.1 %
|
-0.8
|
-20.5 %
|
|
13
|
Virginia Beach,
VA
|
23
|
$349,186
|
4.6 %
|
2.5 %
|
1.2
|
-42.6 %
|
|
14
|
Cleveland,
OH
|
-6
|
$228,140
|
6.4 %
|
2.8 %
|
0.6
|
-52.6 %
|
|
15
|
Miami, FL
|
10
|
$486,056
|
1.0 %
|
3.5 %
|
1.0
|
-4.4 %
|
|
16
|
Boston, MA
|
10
|
$694,494
|
4.7 %
|
2.1 %
|
0.1
|
-45.8 %
|
|
17
|
Oklahoma City,
OK
|
21
|
$230,466
|
2.5 %
|
2.4 %
|
0.7
|
-2.5 %
|
|
18
|
Detroit, MI
|
6
|
$248,126
|
4.8 %
|
1.7 %
|
0.1
|
-34.1 %
|
|
19
|
San Diego,
CA
|
10
|
$939,174
|
3.8 %
|
2.5 %
|
-0.4
|
-32.9 %
|
|
20
|
Birmingham,
AL
|
21
|
$247,509
|
0.7 %
|
1.3 %
|
0.4
|
-13.9 %
|
|
21
|
Raleigh, NC
|
-4
|
$441,066
|
1.1 %
|
1.7 %
|
-0.7
|
-13.5 %
|
|
22
|
Riverside,
CA
|
12
|
$583,420
|
3 %
|
2.4 %
|
-0.3
|
-25. %
|
|
23
|
Orlando, FL
|
-14
|
$391,924
|
-0.3 %
|
2.2 %
|
-0.6
|
17 %
|
|
24
|
Atlanta, GA
|
-18
|
$379,262
|
0.3 %
|
2.6 %
|
-0.7
|
-3 %
|
|
25
|
Pittsburgh,
PA
|
-9
|
$208,583
|
2.8 %
|
0.6 %
|
1.0
|
-32.3 %
|
|
26
|
Louisville,
KY
|
-12
|
$255,206
|
4.7 %
|
1.9 %
|
-0.4
|
-27.1 %
|
|
27
|
Phoenix, AZ
|
8
|
$454,001
|
-0.3 %
|
1.7 %
|
-0.4
|
-7.9 %
|
|
28
|
Washington,
DC
|
11
|
$567,825
|
4.4 %
|
0.8 %
|
-0.1
|
-38.8 %
|
|
29
|
Tampa, FL
|
-19
|
$372,170
|
-2.5 %
|
2.2 %
|
-0.6
|
7.3 %
|
|
30
|
Dallas, TX
|
-9
|
$368,683
|
-0.4 %
|
1.0 %
|
-0.4
|
1.5 %
|
|
31
|
Nashville,
TN
|
2
|
$436,301
|
1.7 %
|
2.2 %
|
-0.8
|
-10.8 %
|
|
32
|
Seattle, WA
|
0
|
$735,683
|
5.1 %
|
1.9 %
|
-1.0
|
-23.5 %
|
|
33
|
Baltimore,
MD
|
10
|
$386,001
|
3.6 %
|
0.8 %
|
-0.2
|
-46.9 %
|
|
34
|
Los Angeles,
CA
|
-11
|
$949,057
|
4.6 %
|
1.7 %
|
-0.4
|
-26.1 %
|
|
35
|
Las Vegas,
NV
|
-23
|
$428,725
|
5.1 %
|
1.1 %
|
0.2
|
-18.3 %
|
|
36
|
San Antonio,
TX
|
13
|
$280,603
|
-1.8 %
|
0.3 %
|
0.2
|
22.7 %
|
|
37
|
Sacramento,
CA
|
-10
|
$577,630
|
2.1 %
|
0.0 %
|
0.0
|
-29.9 %
|
|
38
|
Houston, TX
|
9
|
$306,191
|
0.6 %
|
0.6 %
|
-0.3
|
1 %
|
|
39
|
Chicago, IL
|
-17
|
$321,484
|
5.4 %
|
1.2 %
|
-0.5
|
-48.6 %
|
|
40
|
Jacksonville,
FL
|
-9
|
$353,501
|
-0.9 %
|
1.9 %
|
-0.8
|
14.1 %
|
|
41
|
New York, NY
|
4
|
$677,368
|
6.4 %
|
1.3 %
|
0.3
|
-55.9 %
|
|
42
|
Milwaukee,
WI
|
2
|
$343,920
|
5.3 %
|
2.4 %
|
-1.6
|
-27.1 %
|
|
43
|
Memphis, TN
|
-30
|
$233,885
|
1.1 %
|
2.3 %
|
-1.7
|
-1.2 %
|
|
44
|
Denver, CO
|
4
|
$579,604
|
0.8 %
|
0.1 %
|
-0.6
|
4.3 %
|
|
45
|
Minneapolis,
MN
|
1
|
$368,562
|
2.5 %
|
0.2 %
|
-0.8
|
-26.7 %
|
|
46
|
Austin, TX
|
-6
|
$444,248
|
-3.2 %
|
-0.4 %
|
-0.6
|
33.7 %
|
|
47
|
Portland, OR
|
-10
|
$543,814
|
1.8 %
|
0.3 %
|
-1.3
|
-19.3 %
|
|
48
|
San Jose, CA
|
-6
|
$1,588,186
|
7.9 %
|
-0.2 %
|
-1.3
|
-34.8 %
|
|
49
|
San Francisco,
CA
|
-19
|
$1,140,718
|
2.7 %
|
-1.7 %
|
-1.1
|
-3.5 %
|
|
50
|
New Orleans,
LA
|
0
|
$235,657
|
-1.4 %
|
-3.8 %
|
-0.9
|
61.1 %
|
About Zillow Group:
Zillow Group, Inc.
(Nasdaq: Z and ZG) is reimagining
real estate to make home a reality for more and more people.
As the most visited real estate website in the United States, Zillow and its
affiliates help people find and get the home they want by
connecting them with digital solutions, dedicated partners and
agents, and easier buying, selling, financing, and renting
experiences.
Zillow Group's affiliates, subsidiaries and brands include
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All marks herein are owned by MFTB Holdco, Inc., a Zillow
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#10287 (www.nmlsconsumeraccess.org). © 2025 MFTB Holdco, Inc., a
Zillow affiliate.
(ZFIN)
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