Zillow published an analysis this week predicts the nation's hottest housing markets for 2025, where sellers have the biggest advantage.
The heat ranking takes into account local home value growth, as well as the speed of home sales and new home job growth.
Buffalo, New York topped the list for the second year in a row. Zillow predicts the area will be the hottest housing market this year due to lower-than-average home prices and strong home value growth.
Buffalo also has the highest number of new jobs per new home permit, meaning it has the highest expected demand for housing. New jobs translate into new residents moving into an area, increasing competition and home prices until builders can build enough homes to meet demand.
“Construction that keeps pace with an area's growth remains an essential part of keeping homes available and accessible,” Zillow Chief Economist Skylar Olsen said in a press release. “In chilly Buffalo, competition among buyers will remain hot, with employment growing much faster than builders are adding homes.”
Zillow predicted last year that Buffalo would be a hot market in 2024, and it was correct. The area was a strong seller's market last year, according to Zillow's own market heat index.
Second on the list is Indianapolis, Indiana. With a typical home value of $275,639 in 2024, Indianapolis stands out in terms of affordability, which Zillow predicts will attract potential home buyers this year.
Third, fourth and fifth on the list are Providence, Rhode Island; Hartford, Connecticut; and Philadelphia, Pennsylvania. Zillow says these areas stand out as prime housing markets because of their relative affordability compared to the more expensive Northeast areas they border, such as New York and Boston.
Here's a list of Zillow's predictions for the 10 hottest housing markets in the US in 2025, along with Zillow's estimates for the typical home value in 2024 and projected home value growth for 2025 in those areas.
1. Buffalo, NY
2024 Zillow Home Value Index: $260,537
Home Value Growth Forecast 2025: 2.8%
2. Indianapolis, IN
2024 Zillow Home Value Index: $275,639
Home Value Growth Forecast 2025: 3.4%
3. Providence, NY
2024 Zillow Home Value Index: $484,019
Home Value Growth Forecast 2025: 3.7%
4. Hartford, CT
2024 Zillow Home Value Index: $363,298
2025 Home Value Growth Forecast: 4.2%
5. Philadelphia, PA
2024 Zillow Home Value Index: $362,744
Home Value Growth Forecast 2025: 2.6%
6. St. Louis, MO
2024 Zillow Home Value Index: $250,141
Home Value Growth Forecast 2025: 1.9%
7. Charlotte, NC
2024 Zillow Home Value Index: $377,450
Home Value Growth Forecast 2025: 3.2%
8. Kansas City, MO
2024 Zillow Home Value Index: $299,118
Home Value Growth Forecast 2025: 2.7%
9. Richmond, VA
2024 Zillow Home Value Index: $368,957
Home Value Growth Forecast 2025: 2.9%
10. Salt Lake City, UT
2024 Zillow Home Value Index: $543,324
Home Value Growth Forecast 2025: 2.3%