Despite a rebound in the real estate market after the U.S. election and an increase in housing demand, many potential buyers are still hesitant: should they buy now or wait? Where is the best place to buy a house? Below are the top ten hottest real estate markets in the United States for 2025 as selected by the National Association of Realtors (NAR).
NAR stated that the outlook for the U.S. real estate market is promising, with certain regions expected to attract more buyers in 2025 due to favorable conditions such as high housing inventory, lower house prices, a higher probability of obtaining low mortgage rates, and higher incomes among millennials.
NAR evaluated factors such as housing price appreciation, the percentage of families reaching homebuying age in the next five years, employment growth, and the proportion of millennials with purchasing power in different regions of the United States. They found that the following ten areas have many conditions superior to other regions, with strong local demand for housing. Among these areas, four are in the southern U.S. and three are in the Midwest. They are listed in alphabetical order:
1) Boston-Cambridge-Newton metropolitan area, located in Massachusetts-New Hampshire. Many homeowners in this area are not constrained by the “lock-in effect,” so when mortgage rates stabilize at 6%, more owners may be willing to sell, increasing the housing supply.
2) Charlotte-Concord-Gastonia metropolitan area, located in North Carolina-South Carolina. Surprising high employment growth and immigration rates in the past five years in this area.
3) Grand Rapids-Kentwood metropolitan area, located in Michigan. Over one-third of millennials renting in this area are expected to have the ability to purchase a home, with another 12% of families entering the “golden homebuying age” in the next five years.
4) Greenville-Anderson, located in South Carolina. The average mortgage rate in this area last year was “significantly below the national average.”
5) Hartford-East-Hartford-Middletown, located in Connecticut. The overall financial situation in this area is good, with a mortgage rate of 6.5% last year, one of the lowest in the “hottest housing markets.”
6) Indianapolis-Carmel-Anderson, located in Indiana. Nearly 42% of inventory homes in this region are priced below $236,000, making it highly attractive to young first-time homebuyers.
7) Kansas City, spanning Missouri and Kansas. The popularity of housing in this metropolitan area can be attributed to homeowners not being constrained by the “lock-in effect” and lower average mortgage rates. Over one-third of millennials also have the ability to purchase homes here.
8) Knoxville, located in Tennessee. This area is a top choice for many out-of-state residents, driving a surge in housing demand.
9) Phoenix-Mesa-Chandler, located in Arizona. Due to the “lower cost of living and more affordable housing” in these cities, a large number of Californians are relocating here.
10) San Antonio-New Braunfels, located in Texas. This area not only has strong employment growth, but also mortgage rates lower than the national average.
Although the California housing market has always been hot, factors such as high housing prices and expensive housing costs prevented it from being included in the top ten hottest housing markets for 2025. The median home price in California in October exceeded $888,000, while the overall median home price in the U.S. is around $405,000.
Despite a recent decline in mortgage rates, they are still at historically high levels. Data from Freddie Mac shows that, as of the week ending December 12, the average 30-year fixed-rate mortgage was 6.6%, and the average 15-year fixed-rate mortgage was 5.84%.
NAR Chief Economist Lawrence Yun believes that mortgage rates in the U.S. for 2025 are expected to hover around 6%, becoming a new normal.
“The most severe challenges in affording a home are behind us: more inventory, more stable mortgage rates, and continued growth in employment and income will help more Americans achieve their homeownership dreams,” he said. ◇