Stabilizing mortgage rates and improved inventory set the stage for growth
The National Association of Realtors® (NAR) has unveiled its top 10 housing markets to watch in 2025, predicting strong performances across these regions.
Announced during NAR’s Real Estate Forecast Summit, the list highlights metro areas expected to thrive amid stabilizing mortgage rates and improving housing affordability.
According to NAR chief economist Lawrence Yun, factors driving success in these markets include increased inventory at affordable price points, stronger income growth for young adults, and significant net migration.
“Important factors common among the top performing markets in 2025 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,” said Yun.
Here are the top 10 housing hot spots for 2025, listed alphabetically:
- Boston-Cambridge-Newton, MA-NH
- Charlotte-Concord-Gastonia, NC-SC
- Grand Rapids-Kentwood, MI
- Greenville-Anderson, SC
- Hartford-East-Hartford-Middletown, CT
- Indianapolis-Carmel-Anderson, IN
- Kansas City, MO-KS
- Knoxville, TN
- Phoenix-Mesa-Chandler, AZ
- San Antonio-New Braunfels, TX
Read next: As a busier market looms, how can brokers gear up for success in 2025?
The Federal Reserve’s gradual easing of monetary policy is expected to stabilize mortgage rates around 6% in 2025. NAR anticipates this stabilization will encourage more buyers to return to the market, driving existing-home sales to approximately 4.5 million.
“Home buyers will have more success next year,” he said in the report. “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 forecast a 2% increase in home prices, bringing the median price for existing homes to $410,700. Inventory is projected to improve as new construction picks up and more homeowners decide to sell, buoyed by stabilizing rates and favorable market conditions. Housing starts are expected to reach 1.45 million units annually, approaching the historical average of 1.5 million.
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