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Buying a home is neither easy nor cheap, especially in today's market.
Although it's still too early to tell whether the real estate market will favor buyers or sellers next year, some areas will offer more favorable market conditions than others, a new report from the National Association of Realtors says.
The NAR identified the top ten metropolitan areas as “housing hotspots” for 2025 based on various economic, demographic and housing factors.
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“Important factors common to the best-performing markets in 2025 include available inventory at affordable prices, a better chance of low mortgage rates, higher income growth for young adults and net migration to certain metropolitan areas,” said Lawrence Yun, chief economist of the NAR senior vice president for research said in a statement.
The 10 “living hotspots”
“2025 is expected to be a year of more opportunity for home buyers and sellers,” said Nadia Evangelou, senior economist and research director at NAR.
Four of the NAR's ten “hotspots” are in the South – but unlike those on other lists, none are in Florida. Three of the hotspots on the list are in the Midwest.
Here is the full NAR list:
- 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
- San Antonio-New Braunfels, Texas
While the NAR did not rank the hotspots, the Greenville and Anderson, South Carolina metropolitan area stands out, according to the report.
Factors such as a positive financing environment, strong immigration gains, better affordability for first-time buyers, strong job creation and an increase in property prices are making the region stand out, Evangelou said. About 42% of the properties in the area are entry-level homes.
“Unprecedented times”
While “many of these areas have grown in recent years,” it's important to remember that “we may be in for some pretty unprecedented times in 2025 and beyond,” said Jacob Channel, senior economist at LendingTree.
President-elect Donald Trump has been vocal about implementing ideas such as mass deportations and tariffs on all imports, as well as ending the conservatorships of Fannie Mae and Freddie Mac, he said.
If implemented, such ideas could have a domino effect on housing affordability. Immigrants make up about a third, or 32.5%, of construction tradespeople, according to an analysis of 2023 census data by the National Association of Home Builders.
A change in immigration policy could impact the sector's workforce. Additionally, if there is a shortage of workers, wages could rise and be passed on to buyers through higher property prices, experts say.