What do Boston and Kansas City have in common?
According to a newly released report from the National Association of Realtors (NAR), they’re among America’s top 10 housing market hot spots to keep an eye on in 2025.
“Home buyers will have more success next year,” said NAR’s chief economist and senior vice president of research Lawrence Yun in the study. “The worst of the affordability challenges are over as more inventory, stable mortgage rates and continued job and income growth pave the way for more Americans to achieve homeownership.”
That said, NAR predicts that mortgage rates — which, for several years, languished at high levels to combat inflation — will stabilize near 6% in 2025, “likely establishing a new normal.”
At that rate, the report continues, a greater number of home buyers will enter or return to the market, with a projected 4.5 million existing-home sales next year.
The trade association also anticipates that home prices will continue their rise in 2025, though at a slower pace than previous years. Increases, the study says, will likely be around 2%, making for a median existing-home price of $410,700.
At the top of the 2025 list, due to alphabetical order, is Boston-Cambridge-Newton, Massachusetts-New Hampshire. The Boston area alone is known to be more expensive — with the whole swath boasting an average home price of nearly $700,000, according to Zillow. NAR predicts the region will benefit from mortgage rates stabilizing in 2025, especially with that force helping homeowners feel encouraged to list.
To locate the 2025 markets to watch, NAR analyzed how each area performs relative to the national level across 10 economic, demographic and housing factors. Among them: the share of locked-in homeowners (those reluctant to sell due to high rates), job growth, the average mortgage rate, the share of millennial renters who can afford to purchase a home and the share of out-of-state movers buying homes.
Next comes Charlotte-Concord-Gastonia, North Carolina-South Carolina. Over the past five years, and especially since COVID-19, the Carolinas saw a 10% growth in jobs — as well as a number of residents from across the nation heading to the area not only for employment opportunities, but also for better weather. Charlotte alone has a stock of affordable residences, with a reported 43% of them priced below $324,000.
Not far from the Charlotte area is Greenville-Anderson, South Carolina — Greenville being a charming city with a vibrant, walkable downtown that offers easy access to hiking and biking trails for outdoor activity. The city’s $307,315 market average is up nearly 3% year-over-year; listings usually only stay online for 17 days.
As for Kansas City — listed in the report as Kansas City, Missouri-Kansas — its benefits include affordability and competitive financing. Its roughly $234,000 average house price allows one in three millennials to own in that metro, but that figure has grown by 3% year-over-year. Moreover, nearly half of all home sales in the city came at less than the asking price in October.
Read on for the full list.
- Boston-Cambridge-Newton, Massachusetts-New Hampshire
- Charlotte-Concord-Gastonia, North Carolina-South Carolina
- Grand Rapids-Kentwood, Michigan
- Greenville-Anderson, South Carolina
- Hartford-East-Hartford-Middletown, Connecticut
- Indianapolis-Carmel-Anderson, Indiana
- Kansas City, Missouri-Kansas
- Knoxville, Tennessee
- Phoenix-Mesa-Chandler, Arizona
- San Antonio-New Braunfels, Texas