Buffalo, N.Y., will for the second year in a row be the hottest housing market in the country due to its job market stability and affordable home prices, according to a report released by online real-estate marketplace Zillow on Tuesday.
The report forecasted that nationwide there will be a steady but slow growth for both home sales and values in 2025, although fluctuating mortgage rates and affordability will still be obstacles for potential home shoppers.
Indianapolis was second on the list due, in part, to its “strong” home price forecast for 2025 which is expected to be bigger than last year.
Providence, R.I.; Hartford, Conn. and Philadelphia, Pa. rounded out the top five hottest housing markets, according to the report.
The report was produced based on an analysis of recent market velocity, changes in the labor market, number of homeowner households, home construction activity and home value growth.
Buffalo, located in Western New York near the Canadian border, has the most new jobs per new home permitted, which Zillow said was a key component of its ranking, along with relatively high expected appreciation.
Compared to last year’s list, Virginia Beach has seen the biggest jump, leaping over 23 markets and ending up in 13th place due to job growth that “far outpaced” new home permitting, according to the report.
The city that saw the biggest drop in rankings was Memphis, dipping by 30 spots with new home permitting overshadowing relatively low job growth.
“In 2025, 42 of the 50 largest markets are expected to see homeownership rise. The market with the biggest lift in the for-sale market is Austin, with a trend suggesting the formation of 8.9 percent more owning households (assuming there are homes available for them to buy). Orlando and Jacksonville follow at 8.6 percent and 7.8 percent, respectively,” Anushna Prakash, an economic analyst at Zillow, wrote in the report.
Among those that are expected to see a dip in homeowning households are Birmingham, Hartford and Oklahoma City.
