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On By Littum

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For the second year in a row, Buffalo, New York has secured the top spot Zillow’s list of the hottest housing markets for 2025 and earns the honor of being the first market to secure number one this year against each other.

According to Zillow’s analysis, which predicts the housing markets that will be the most competitive for buyers in the coming year, hot markets have spread from the Northeast, Great Lakes and South regions to the Midwest and West. The key factors that go into creating a “hot” market are relative affordability and supply following demand, the analysis says.

Nationally, Zillow predicted relatively steady growth for both home values ​​and sales in 2025 and inventory recovering from the pandemic. However, mortgage rates are expected to remain somewhat volatile.

Experts from Redfin and Fannie Mae and Pulsenomics LLC told USA TODAY in December that they expect a 3.8-4% increase in the average home sales price and a 4.2-5.1% bump in home sales by 2025. They also predicted that mortgage rates will continue hovering in the high 6% range.

“Construction that keeps pace with an area’s growth remains a critical piece of keeping housing affordable and accessible. In cool Buffalo, competition among buyers will remain hot, where employment is growing far faster than builders are adding housing,” says Skylar Olsen, Zillow’s Chief Economist. , in a statement. “Shoppers nationwide should see more opportunities for sales 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.”

Zillow’s Hottest Method to List Home Markets

Zillow’s rankings are made by examining the nation’s 50 most populous metros, taking into account Zillow’s forecast for local home value growth and the speed at which home sellers are entering into contracts with buyers. Zillow also measured typical home value, the average mortgage payment, typical rent and the average number of days a house is on the market for each city.

The analysis also includes:

  • Expected increase in value from November 2024 to November 2025
  • Job growth over two years per housing construction in total
  • Growth in owner-occupied households

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Zillow’s top 10 hottest housing markets in 2025

The primary reasons Buffalo was number one again, according to Zillow? Job and wage growth, relative affordability and demand outweighing supply.

According to Zillow’s analysis, Buffalo has the most new jobs per new home allowed – a measure of expected housing relative to new residents brought to the area by new jobs. It also benefits from relative affordability both in the context of the larger market and as an alternative to the very expensive New York City or other northeastern cities such as Boston. Lower-than-average home prices and rental costs in Buffalo bolstered demand and helped push it to the top spot.

Meanwhile, Zillow credits Indianapolis’ second-place finish to its strong home price forecast for this year.

  • Buffalo, NY
  • Indianapolis, IN
  • Providence, RI
  • Hartford, CT
  • Philadelphia, PA
  • St. Louis, Mo
  • Charlotte, NC
  • Kansas City, MO
  • Richmond, VA
  • Salt Lake City, UT

Cities that made the biggest gains

  • Virginia Beach, VA: no. 13 in 2025, an increase of 23 places from 2024
  • Oklahoma City, OK: no. 17 in 2025, an increase of 21 places from 2024
  • Birmingham, AL: no. 20 in 2025, an increase of 21 places from 2024

Cities that experienced the greatest losses

  • Memphis, TN: no. 42 in 2025, down 30 points from 2024
  • Las Vegas, NW: no. 35, down 23 points from 2024
  • Tampa, FL: No. 29, down 19 points from 2024
  • San Francisco, California: no. 49, down 19 points from 2024

Cast: Gabe Hauari, Andrea Riquier, USA TODAY