(NewsNation) — Buffalo, New York is expected to be the hottest major housing market in the U.S., for the second year in a row, according to Zillow.
“Construction that keeps pace with an area’s growth remains a crucial piece of keeping homes available and accessible. In chilly Buffalo, competition among buyers will remain hot, with employment growing far faster than builders are adding homes,” said Skylar Olsen, Zillow’s chief economist.
Relative affordability and few homes for sale are common threads among what should be the most competitive markets for buyers this year, according to Zillow. To make its predictions, Zillow reviewed several factors including how quickly homes have been selling, and its own forecast for home value growth in the 50 most populated cities nationwide.
The second-hottest market, Zillow predicts, will be Indianapolis. Northeast metros such as Providence, Rhode Island and Hartford, Connecticut are also expected to remain hot.
| 2025 Hottest Markets Rank | Metropolitan Area | Change in Rank from 2024 | Zillow Home Value Index (ZHVI) 2024 | ZHVI Year over Year Growth, 2024 | 2025 Home Value Growth Forecast | Jobs per New Home Permitted | Change in Inventory Versus 2018–2019 Averages |
| 1 | Buffalo, NY | 0 | $260,537 | 5.7 % | 2.8 % | 2.0 | -46.1 % |
| 2 | Indianapolis, IN | 2 | $275,639 | 3.6 % | 3.4 % | 0.5 | -16.1 % |
| 3 | Providence, RI | 2 | $484,019 | 6.7 % | 3.7 % | 1.3 | -62 % |
| 4 | Hartford, CT | 15 | $363,298 | 6.5 % | 4.2 % | 1.1 | -68.6 % |
| 5 | Philadelphia, PA | 6 | $362,744 | 4.6 % | 2.6 % | 1.5 | -46 % |
| 6 | St. Louis, MO | 9 | $250,141 | 4.2 % | 1.9 % | 1.3 | -43.8 % |
| 7 | Charlotte, NC | 0 | $377,450 | 1.6 % | 3.2 % | -0.5 | 17.5 % |
| 8 | Kansas City, MO | 10 | $299,118 | 3.8 % | 2.7 % | 0.2 | -36 % |
| 9 | Richmond, VA | 11 | $368,957 | 4.1 % | 2.9 % | -0.1 | -43.3 % |
| 10 | Salt Lake City, UT | 18 | $543,324 | 2.8 % | 2.3 % | 0.5 | -4.8 % |
What will home buying look like in 2025?
Mortgage rates could be unpredictable throughout the year, but there is good news, Olsen said.
“Shoppers nationwide should see more options for sale than in recent years, along with slow and steady price growth. That’s the good news. But both buyers and sellers should expect unpredictable mortgage rates.”