The 10 biggest cities for homebuyers in 2025

The housing market will still be tough for homebuyers this year, thanks to high prices and a persistent supply shortage.

But the National Association of Realtors (NAR), predicts mortgage rates stabilize near 6% in 2025.

At least ten cities will become "housing hot spots," according to a recent NAR report, benefitting from robust job growth, ample housing stock and more.

"Important factors common among the top performing markets in 2025 include available inventory at affordable price points, a better chance of unlocking low mortgage rates, higher income growth for young adults and net migration into specific metro areas," NAR's chief economist Lawrence Yun said in a statement.

NAR projects 4.5 million home sales nationwide in 2025, with a median price tag of $410,700. Houses in most of the cities on NAR's hot list, however, average well below that.

Where will the next homebuying boom happen? According to NAR, all eyes should be on the South, Midwest and New England.

Househunters are being influenced by a host of factors, according to NAR. Some have to do with what they're looking for, while others are more about what the market has to offer.

• Affordability: Unsurprisingly, one of the biggest things that buyers are prioritizing is cost — especially in the form of lower mortgage rates. The average rate hovered near 7.0% nationwide in 2023, the last year NAR had data for. Cities with average rates below that will be more likely to draw buyers.
  
• A healthy economy: From October 2019 to October 2024, the total number of jobs in the U.S. grew by 5.0%. House hunters are more likely to buy in areas with above-average job growth over the past five years, according to NAR's forecast. Some cities on its list have seen employment growth as high as 11.6% in the same timeframe.

• A healthy number of starter homes: First-time buyers often look for starter homes, or properties listed at 85% or below the area's median home price. "Areas with more starter-home inventory provide greater accessibility for younger or lower-income buyers, driving demand and creating a more affordable housing market," NAR said in the report.
  
• Available inventory: Much has been made about "locked-in" homeowners, whose mortgages are so enviably low they're in no rush to sell and be saddled with higher rates. To predict which cities will have more homes on the market, NAR focused on regions with an ample number of homeowners paying at least 6%.
  
• More long-time homeowners: The association also zeroed in on spots where a large number of people have lived in their homes for over 16 years, a demographic considered most likely to sell. "Areas with a larger share of these homeowners may see an uptick in listings," per the report, "helping to ease supply constraints."
  
• More people reaching homebuying age: The average first-time homebuyer is 38, so areas with a larger share of households in their mid-30s and 40s "can expect stronger long-term demand for homes, affecting new construction and market stability."

The top cities for homebuyers are fairly spread out across the U.S., although the South led the way with four of the ten housing hot spots, followed by the Midwest with three. Notably absent from NAR's list were cities in the West or Northwest. (Data from NAR's Homebuying Hot Spots for 2025 report unless otherwise noted).

With lower-than-average mortgage rates and an expectation that many existing homes will soon be up for sale, NAR is betting on some New England cities to be hot in 2025.

Hartford, Connecticut

The Hartford-East-Hartford-Middletown, Connecticut region averaged a mortgage rate of 6.50% in 2023. That's 0.50% lower than the national average and one of the lowest rates on this list.

NAR predicts many area homeowners are on the brink of listing their homes: Nearly 60% have passed the 16-year mark in their houses, "indicating a potential increase in local inventory, which could help alleviate supply constraints."

Boston, Massachusetts

The Greater Boston area — which includes Cambridge, Massachusetts, and Newton, New Hampshire — is home to iconic museums, nightlife, parks and some of the nation's most prestigious universities.

NAR predicts Boston will be a popular destination for homebuyers in 2025 because of its higher percentage of starter homes: Over 40% of owner-occupied units are valued below $550,000.

And, as mortgage rates stabilize near 6%, there should also be fewer locked-in homeowners, the report predicts.

"Boston's mortgage rates have been relatively lower than the national average, which provides a competitive edge in today's challenging financing environment," NAR states.

Cities in the heartland are also poised to be hotspots for homebuying, according to NAR, thanks to affordable housing stock.

Grand Rapids, Michigan

The Grand Rapids-Kentwood, Michigan region is one to watch in 2025, NAR says, because there are fewer owners locked into a rate below 6%, "which could lead to more inventory in this area."

The healthy number of starter homes will enable newcomers to lay down roots, according to the report.

NAR also points to data that 35.60% of local renters age 28 to 44 (i.e. prime homebuying age) can afford to buy, compared to just 29.70% nationwide:

Kansas City, Missouri

Kansas City has a champion NFL team, a renowned jazz scene and arguably the best barbecue in the country. (We said arguably).

NAR expects a boom in the metro area, largely because nearly 34% of renters ages 28 to 44 can afford homeownership. Mortgage rates are also slightly below the national average, and fewer homeowners are considered locked into their mortgages.

"This affordability, combined with its competitive financing environments, makes Kansas City a key player among top-performing housing markets in the coming year."

Indianapolis, Indiana

Another midwestern sports hub, Indiana's capital made NAR's list primarily because of its affordability and growing economy.

Close to 42% of the housing stock is valued at below $236,000, making it attractive for first-timers looking for starter homes. Plus, nearly a third of renters between 28 and 44 can afford a home.

The Greater Indianapolis area, which includes Carmel and Anderson, has also seen fewer "locked-in" homeowners and outsized job growth: Employment rates jumped 9.3% between October 2019 and October 2024, nearly double the nationwide rate.

The South and Southwest have been the center of homebuying since 2020, with many drawn to warm weather and relatively affordable housing. This year, the region dominates NAR's list — but its smaller, more affordable cities taking the spotlight

San Antonio, Texas

About 90 minutes from Austin, San Antonio offers a more affordable alternative to Texas' high-priced hipster capital.

NAR points to San Antonio's low mortgage rates and booming job market as the chief reasons the Texas Triangle's southwestern corner will be a homebuying hot spot in 2025: Between 2019 and 2024, the city saw 10.7% job growth, more than twice the national rate, while the mortgage rate in 2023 was just 6.4%, 0.60% less than the national average.

Phoenix, Arizona

Nestled in the Sonoran Desert, Phoenix was added to this list, in part, because it's attracting outpriced California homebuyers drawn to cheaper housing and a lower cost of living.

The metro area, which also includes Chandler and Mesa, has also seen a 12% job increase since 2019, according to NAR, one of the largest jumps on this list.

Knoxville, Tennessee

The country music mecca has also drawn out-of-state homebuyers, with a net migration of 1.7% in 2023, larger than most other gains on this list.

NAR predicts Knoxville's popularity with homebuyers will continue in 2025, thanks to a less pronounced "lock-in effect" with fewer borrowers holding mortgages with rates under 6%.

Charlotte, North Carolina

This Southern charmer witnessed an amazing 10% job growth over the last five years, double the national average. And with 43% of houses considered starters (priced under $324,000), it's a welcoming oasis for first-time buyers and young families.

NAR predicts the Charlotte metropolitan area will see even more growth in 2025, with 11% of households reaching prime homebuying age by 2040.

Greenville, South Carolina

It might be the least-known burgs on this list but, NAR maintains, Greenville has plenty of things that homebuyers want — including a bustling economy and ample starter homes.

The metro area, which encompasses nearby Anderson, saw a net migration of 1.7% in 2023, the most of any city on this list, and jobs grew 8% between 2019 and 2024.

The local market is also ripe for first-time buyers: More than 42% of the housing stock is considered starter homes and nearly a third of renters in their prime homebuying years can afford to buy.

Per NAR, "Greenville offers accessibility and stability for families and young professionals alike."

If you're planning to buy a home in 2025 (in these metro areas or anywhere else) there are some common-sense steps to set you on the right path.

Step 1: Save up for a down payment

Depending on what type of home loan you get, you'll probably need between 5% and 20% as a down payment. Keep in mind that a larger down payment can lower your monthly mortgage payments, increase your home equity and get you out of paying private mortgage insurance sooner.

You'll also need to save up for closing costs, which can equal 3% to 6% of your total home loan, as well as additional funds for moving, renovations and additional savings.

Step 2: Investigate first-time homebuyer programs

In real estate terms, a first-time homebuyer is anyone who hasn't owned a house in at least three years. If that's you, there are numerous national, state and local grants and forgivable loans available to help make your dream of homeownership a reality.

Guild Mortgage offers several programs, like the Guild Gateway to Homeownership program offers a lender credit of up to $5,000 for qualified homebuyers in certain geographical areas.

Also geared towards first-time buyers, Rocket Mortgage's ONE+ loan enables eligible borrowers to put as little as 1% down, with Rocket Mortgage providing an additional 2%.

Step 3: Look into government-backed mortgages

The Federal Housing Authority, the Department of Veterans Affairs and the U.S. Department of Agriculture all finance home loans with great perks, including no down payments and lower credit score requirements. However, they also come with certain restrictions.

FHA loans

Aimed at low- to moderate-income families, FHA loans come with lower closing costs and down payments as low as 3.5% if you have a 580 credit score. (If you have a 500 score, you'll need to put at least 10% down.)

Pennymac has some of the lowest rates among FHA lenders we've found and CrossCountry Mortgage's Smart Start program, which offers up to $4,000 in down payment assistance to first-time homebuyers, can be used for FHA loans.

VA loans

Reserved for active duty service members and veterans, VA loans allow borrowers to put nothing down and avoid paying mortgage insurance. In addition, interest rates on VA loans are typically lower than with a conventional mortgage

Navy Federal Credit Union and Veterans United offer some of the lowest rates on the market, scoring them both slots on our list of the best VA loans.

USDA loans

Available for buyers in select rural and suburban zip codes, USDA loans let borrowers put as little as 0% down. PNC Bank's broad branch network and PrimeLending's speedy closing are among the reasons we put them on our list of top USDA mortgage lenders.

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