According to Realtor.com, the housing markets positioned for significant growth in 2025 are primarily located in the South and West.
Amid rising home prices and increasing mortgage rates throughout 2024, these regions are proving resilient.
The website has spotlighted key metropolitan areas in states such as Colorado, Florida, Virginia, and Texas as the prime contenders for the coming year.
Key Factors in Market Evaluation
Realtor.com’s analysis utilized a blend of economic indicators and housing trends to assess the 100 largest metropolitan areas across the United States.
Factors such as projected growth in home prices and anticipated sales for 2025 were central to the evaluation.
A noteworthy trend identified was the demographic presence of younger families, especially those under the age of 35, along with a significant number of military households in these favored markets.
Topping the list for 2025 is Colorado Springs, Colorado.
It is followed closely by Miami, Virginia Beach, El Paso, Richmond, Orlando, McAllen, Phoenix, Atlanta, and Greensboro.
The chief economist from Realtor.com noted that a slight reduction in mortgage rates is likely next year.
This may create favorable conditions in these markets, which are characterized by relatively affordable housing options and a variety of new and existing properties.
Moreover, specialized mortgage products could provide better opportunities for homebuyers eager to navigate the market.
Affordability and Ownership Trends
Interestingly, most of the top ten markets offer more affordable living costs compared to the national average.
Among these, McAllen, Texas, stands out as the most budget-friendly option, with costs running about 13% below the national average.
In contrast, Miami ranks as the least affordable, with living expenses soaring 11.5% above the national norm.
While home prices in these highlighted regions remain below the national average, income levels are also typically lower.
Residents in these markets allocate around 31.1% of their income to housing—slightly above the national average of 29.2%.
To make up for lower incomes, many homebuyers are seeking flexible work arrangements.
In fact, five of the top ten markets—Richmond, Atlanta, Phoenix, Colorado Springs, and Orlando—report remote and hybrid job listings at rates higher than the national average.
Additionally, a considerable segment of homeowners in these areas owns their properties outright.
This ownership trend may shield these markets from some adverse effects of rising mortgage rates and reduce the lock-in effect.
McAllen, El Paso, Miami, and Greensboro boast high rates of unencumbered ownership, with figures at 61.7%, 49%, 43.8%, and 38.2%, respectively.
Looking Ahead
In the top ten markets, families with children make up, on average, 28.8% of households, surpassing the national average of 26.5%.
Furthermore, about one in seven residents are either active-duty military members or veterans.
However, Realtor.com offers a note of caution regarding the outlook for home sales in 2025.
They predict a modest 1.5% increase in existing-home sales, translating to approximately 4 million sales.
In contrast, HousingWire projects a slightly more optimistic figure, estimating around 4.2 million sales.
Political factors will also play a transformative role in shaping market dynamics.
Potential initiatives from President-elect Donald Trump may have significant implications for the broader economy and housing sector as 2025 unfolds.
Source: Housingwire