iCrave Productions | E+ | Getty Images
Buying a home isn't easy or cheap, especially in today's market.
But while it's too early to tell whether the housing market will favor buyers or sellers next year, some areas will offer more favorable market conditions than others, according to a new report from the National Association of Realtors.
NAR has identified the top 10 metro areas as “residential hot spots” for 2025 based on a variety of economic, demographic and residential factors.
More personal finance:
The economy faces “some potential storms” in 2025
What to do if you have “unverifiable income”
What the rise of homeowners associations means for buyers
“Important factors common to the best-performing markets in 2025 include affordable available inventory, a better opportunity to unlock lower mortgage rates, higher income growth for young people and net migration to select urban areas,” Lawrence Yun, chief economist at NAR and senior vice president of research, said in a statement. statement.
Top 10 “Hot Residential Areas”
“2025 is expected to be a year of more opportunity” for both homebuyers and sellers, said Nadia Evangelou, chief economist and director of research at NAR.
Four of NAR's 10 “hotspots” are located in the South — although unlike other lists, none of them are in Florida. There are three other hot spots in the Midwest.
Here is the complete NAR list:
Boston-Cambridge-Newton, Massachusetts-New Hampshire-Charlotte-Concord-Gastonia, North Carolina-South CarolinaGrand Rapids-Kentwood, MichiganGreenville-Anderson, South CarolinaHartford-East Hartford-Middletown, ConnecticutIndianapolis-Carmel-Anderson, IndianaKansas City, Missouri-Kansas Knoxville, Tennessee, Phoenix Mesa Chandler, Arizona, San Antonio-New Braunfels, Texas
While the NAR did not rank hot spots, the metro that includes Greenville and Anderson, South Carolina, 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 rising home prices are all factors that highlight the area, Evangelo said. About 42% of properties in the area are starter homes.
'Unprecedented times'
While “many of these areas have seen growth in recent years,” it's important to remember that “we're likely headed into some unprecedented times in 2025 and beyond,” said Jacob Channel, chief economist at LendingTree.
He said President-elect Donald Trump has been vocal about enacting ideas such as mass deportations and tariffs on all imports, as well as ending conservatorships of Fannie Mae and Freddie Mac.
If such ideas are enacted, they could have domino effects on housing affordability. Immigrants make up about a third, or 32.5%, of building trades, according to an analysis of 2023 Census data by the National Association of Home Builders.
A change in immigration policy could impact the workforce in this sector. Moreover, experts say that with a shortage of workers, wages may rise and be passed on to buyers through higher home prices.
