The real estate market is set for a shakeup in 2025, as affordability, reduced mortgage lock-in effects, and robust job growth steer buyers toward emerging metropolitan areas. According to a new report from the National Association of Realtors (NAR), a mix of affordability and favorable conditions is creating fresh opportunities for homebuyers and investors alike.
Midwest Revival: Indianapolis and Grand Rapids
NAR predicts a Midwest revival, with Indianapolis and Grand Rapids, Michigan, making the list. Grand Rapids benefits from a strong starter-home market and lower mortgage proportions at higher interest rates, creating room for inventory expansion. Meanwhile, Indianapolis’s affordability is a major draw—42% of homes are priced below $236,000, supported by steady job growth.
Post-Pandemic Success: Phoenix, Charlotte, and San Antonio
Markets that experienced post-pandemic success are also holding strong. Phoenix, a migration magnet for Californians, has seen job growth of 12% in the past five years, keeping it a top contender. Similarly, the suburbs of Charlotte have thrived, boasting 10% job growth and a strong supply of homes priced below $324,000. San Antonio, another thriving metro, enjoys impressive job creation and mortgage rates below the national average.
Northeast Opportunities: Boston and Hartford
The Northeast is also seeing opportunities in cities like Boston and Hartford, Connecticut. Boston benefits from lower lock-in effects, combined with 41% of homes valued under $550,000, making it an attractive market for buyers. Hartford offers one of the lowest average mortgage rates at 6.5%, and many homeowners—who have lived in their properties for an average of 17 years—are expected to list their homes in 2025, further boosting inventory.
Rounding Out the Top 10: Greenville, Kansas City, and Knoxville
Rounding out the top 10 are Greenville, South Carolina; Kansas City, Missouri; and Knoxville, Tennessee. Greenville stands out for meeting the most NAR growth criteria, while Knoxville benefits from high migration patterns. Kansas City, on the other hand, offers attractive mortgage conditions and a smaller share of locked-in mortgages.
The Outlook for 2025 Housing Markets
As mortgage rates stabilize and affordability improves, these metro areas are primed to lead the housing market in 2025. Buyers seeking new opportunities and investors tracking market trends should keep a close eye on these emerging hotspots.
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