Buffalo and Indianapolis will be the hottest housing markets of 2025
Zillow’s Top 10 Hottest Housing Markets for 2025
According to Zillow’s latest forecast, these are expected to be the top 10 hottest housing markets this year:
- Buffalo, New York
- Indianapolis, Indiana
- Providence, Rhode Island
- Hartford, Connecticut
- Philadelphia, Pennsylvania
- St. Louis, Missouri
- Charlotte, North Carolina
- Kansas City, Missouri
- Richmond, Virginia
- Salt Lake City, Utah
Buffalo stands out as the first city to claim the top spot for two consecutive years, having also been Zillow’s hottest market pick in 2024.
What Makes These Markets Hot?
Zillow’s forecast is based on several key factors, including:
- Projected home value growth
- Recent market activity and sales velocity
- Labor market trends
- New home construction
- Shifts in homeownership rates
Housing Supply Challenges & Solutions
Zillow predicts slow but steady home price growth and sales across the country in 2025. Buffalo’s home values are expected to appreciate by 2.8%, while Indianapolis is projected to see a 3.4% increase.
“A lot of demand is driven by major universities, young professionals, and first-time buyers taking advantage of relatively affordable housing,” says Zillow economist Orphe Divounguy.
However, he also notes that low inventory remains a challenge, as many older homeowners are staying put instead of selling, limiting available housing for new buyers.
“When you sell and buy another home at the same time, you’re not necessarily easing the housing supply issue,” Divounguy explains. More new construction is needed to help balance the market.
Insights from a Buffalo REALTOR
Kelly Spurlock, real estate broker at HUNT Real Estate and president of the Buffalo Niagara Association of REALTORS, wasn’t surprised to see Buffalo at the top of the list again.
“Buffalo remains incredibly affordable compared to most major metro areas,” she says, noting the median home price is around $250,000, while the average sale price is just under $300,000.
Although inventory has slightly increased, Buffalo is still very much a seller’s market. For buyers looking to navigate the competitive environment, Spurlock offers key strategies to improve their chances of success.