10 Hottest Housing Markets Predicted for 2025: Sun Belt Boom

Are you curious about where the hottest housing markets predicted for 2025 are? Well, get ready to discover some amazing opportunities. Realtor.com forecasts that some markets across the country are poised for significant growth in both home sales and prices in 2025.

These markets, largely concentrated in the South and West, are seeing a combination of factors like increased inventory, younger populations, and government-backed mortgage programs that are fueling the surge in homeownership. Let's dive in and uncover the secrets to why these locations are being touted as the hottest housing markets for the coming year!

10 Hottest Housing Markets Predicted for 2025

The Sun Belt Reigns Supreme: Why These Areas Are Booming

Having analyzed the 100 largest metropolitan areas across the US, Realtor.com predicts that the hottest housing markets predicted for 2025 will be predominantly in the Sun Belt region. This region has been experiencing a surge in popularity, driven by a multitude of factors, including a favorable climate, lower cost of living, and a strong job market in many sectors. The South and West have emerged as prominent locations for new construction, which helps boost inventory levels. Also, these regions have attracted a younger demographic, which is a key driver of housing demand.

I believe that the Sun Belt's appeal is multifaceted. It's no secret that people are increasingly drawn to areas with a mild climate. Who wouldn't want to spend less time shoveling snow and more time enjoying the outdoors? This weather advantage has been a major pull factor for those looking to escape colder climates. Furthermore, many Sun Belt locations offer a significantly lower cost of living compared to traditional hotspots on the coasts. This makes it much easier for younger families and first-time homebuyers to realize the dream of homeownership.

Top 10 Metropolitan Areas for 2025

The hottest housing markets predicted for 2025 are primarily situated in the South and West. Realtor.com has ranked these markets based on their projected combined growth in both home sales and price. Here are the top 10 metropolitan areas:

Rank	CBSA Title	2025 Existing Home Sale Counts Year-over-Year	2025 Existing Home Sale Counts vs 2017–19 Average	2025 Existing Home Median Sale Price Year-over-Year	2025 Existing Home Median Sale Price vs 2017–19 Average	Combined 2025 Existing Home Sales and Price Growth
1	Colorado Springs, CO	27.1%	-5.6%	12.7%	88.9%	39.8%
2	Miami-Fort Lauderdale-West Palm Beach, FL	24.0%	-0.7%	9.0%	100.5%	33.0%
3	Virginia Beach-Norfolk-Newport News, VA-NC	23.4%	24.5%	6.6%	57.3%	29.9%
4	El Paso, TX	19.3%	1.3%	8.4%	71.1%	27.8%
5	Richmond, VA	21.6%	31.7%	6.1%	68.8%	27.6%
6	Orlando-Kissimmee-Sanford, FL	15.2%	32.1%	12.1%	82.6%	27.3%
7	McAllen-Edinburg-Mission, TX	19.8%	18.4%	7.0%	47.5%	26.8%
8	Phoenix-Mesa-Scottsdale, AZ	12.2%	19.1%	13.2%	76.1%	25.5%
9	Atlanta-Sandy Springs-Roswell, GA	15.1%	-7.7%	10.2%	51.9%	25.3%
10	Greensboro-High Point, NC	17.3%	11.0%	7.7%	51.6%	25.0%

Key Factors Driving These Housing Markets:

Several key factors are contributing to the projected growth in these markets:

1. Improved Housing Inventory:

Nationally, the housing market is witnessing a slow but steady recovery in inventory levels. This recovery is more pronounced in the South and West, particularly in the hottest housing markets predicted for 2025. The increase in inventory is partly due to new construction, which has been actively responding to the demand for more homes. In many of these markets, builders are responding to affordability concerns by focusing on smaller homes. In half of the hottest housing markets predicted for 2025, new home construction prices have fallen in the past year.

I personally believe that the focus on smaller homes is a clever move by developers. It helps make homeownership more attainable for a broader segment of the population. This strategy also helps address the shifting preferences of buyers who might be prioritizing smaller footprints over larger, more extravagant homes.

2. New Construction and Existing Home Sales:

New construction is playing a vital role in these hottest housing markets predicted for 2025. Eight of the top 10 metros saw a year-over-year increase in the number of single-family home permits issued. This is crucial because the majority of new multi-family units are likely to be rentals, whereas single-family homes are mostly purchased by owner-occupants. However, new construction isn't the only driver of improved inventory. The recovery of the existing home market is also contributing to the increased number of homes available for sale. This creates a healthy balance for buyers, as they have a wider choice of both new and existing homes to consider.

3. Attracting Younger Families and Military Personnel:

The hottest housing markets predicted for 2025 are attracting a younger demographic. Most of these markets have a higher-than-average proportion of households with individuals under the age of 35. They also over-index in households in the 35-54 age group. This younger demographic is often associated with family formation, leading to a higher demand for homes. Many of these markets also have a higher than average share of households with children. Furthermore, these markets are home to a significant number of military personnel, including active duty and veterans.

I think this trend toward younger populations and military presence is significant. Younger families are typically more mobile and open to relocating to different areas for better job opportunities or a more affordable cost of living. Military households also tend to be more transient, as they might move frequently due to reassignments. These factors can influence the stability and dynamism of the local housing markets. Also, the availability of VA loans for military personnel and veterans plays a key role in making homeownership more accessible.

4. International Connections and a Growing Global Community:

Many of the hottest housing markets predicted for 2025 have a substantial number of foreign-born residents. This international connection can impact the housing market in several ways. It contributes to a more diverse and vibrant community. The presence of international residents and the appeal of these markets to international homebuyers can drive up demand and prices in some cases. For example, the international viewership of listings in El Paso and McAllen is 5 to 6 times higher than the average for the top 100 metros, demonstrating a clear interest from international buyers.

5. Government-Backed Mortgage Programs:

Government-backed mortgages such as VA, FHA, and USDA loans are more common in the hottest housing markets predicted for 2025. This is beneficial for buyers because these programs often allow for lower down payments. The ability to secure a mortgage with a lower down payment reduces the financial barrier to entry for many aspiring homeowners.

6. Affordability and Flexible Work Arrangements:

While affordability is a persistent challenge nationwide, the hottest housing markets predicted for 2025 tend to have a somewhat lower cost of living compared to the national average. This, coupled with the increasing adoption of flexible work arrangements, has made these areas more appealing to buyers. Many of these markets have a higher share of online or hybrid job postings, which gives people more flexibility in where they choose to live and work.

I find it compelling that the trend of remote work is playing a significant role in shaping the housing market. People no longer need to be tied to a particular location for work, which gives them the ability to select a location that aligns with their preferences and budget. This ability to pursue flexible work opportunities has opened up a wide range of possibilities for people who might not have considered relocating to the Sun Belt before.

Exploring the Hottest Housing Markets of 2025 in More Depth:

Colorado Springs, CO

• Strong job growth, primarily in the aerospace and defense industries, is driving a steady influx of young professionals and families.
• The presence of the United States Air Force Academy and Fort Carson military base has contributed to a high concentration of military households, leading to a notable presence of VA loans.
• Relatively lower cost of living compared to other major Colorado cities.
• Outdoor recreation opportunities, including stunning mountain views and nearby hiking trails, make it a desirable location for those who enjoy an active lifestyle.

Miami-Fort Lauderdale-West Palm Beach, FL

• Booming tourism industry, a vibrant arts and culture scene, and a diverse population attract a global influx of residents.
• International appeal, due to its location and strong ties to Latin America and other global regions, has boosted housing demand.
• Strong economy, with growth in sectors like finance, technology, and healthcare.
• Beautiful beaches and a year-round warm climate are major draws for both domestic and international buyers.

Virginia Beach-Norfolk-Newport News, VA-NC

• Significant military presence, including the world's largest naval base, and a strong connection to the defense industry, contribute to stable housing demand and a notable share of VA loans.
• Relatively affordable housing costs compared to the Washington, DC area.
• Access to beaches and outdoor recreation make it a desirable place to live.
• Growing technology sector and a diversified economy.

El Paso, TX

• A relatively low cost of living, compared to other Texas cities and the national average, makes it attractive to first-time homebuyers and families.
• Strong presence of military personnel and a large international community, particularly from Mexico, drive demand.
• Proximity to the border with Mexico provides unique economic opportunities and fosters cross-border cultural exchanges.
• A growing economy with job opportunities in sectors like healthcare, logistics, and manufacturing.

Richmond, VA

• A thriving historical and cultural center, with a rich history and a growing arts scene.
• A relatively affordable cost of living, particularly compared to Northern Virginia and Washington, DC.
• Strong job market in sectors like finance, healthcare, and technology.
• Easy access to outdoor recreation and a convenient location for those who might work in the Washington, DC area.

Orlando-Kissimmee-Sanford, FL

• World-renowned theme parks, a major tourist destination, and a thriving entertainment industry draw a considerable number of visitors and residents.
• Favorable climate, with warm weather year-round, attracts people seeking a sunny lifestyle.
• Growing economy with job opportunities in various sectors.
• Access to lakes, parks, and other outdoor recreation areas.

McAllen-Edinburg-Mission, TX

• Extremely affordable housing, with one of the lowest housing costs in the country.
• A high percentage of homeowners own their homes outright without a mortgage, making the market less affected by mortgage rate fluctuations.
• A large Hispanic population and close proximity to Mexico create a distinct cultural and international connection.
• A growing economy with opportunities in healthcare and agriculture.

Phoenix-Mesa-Scottsdale, AZ

• Mild weather and a strong outdoor lifestyle appeal to those seeking a sunny climate and abundant outdoor recreation.
• A growing economy, particularly in the tech sector, attracts young professionals and families.
• Relatively affordable housing costs, especially when compared to other major Arizona cities.
• A vibrant arts and culture scene and diverse population make it an attractive destination.

Atlanta-Sandy Springs-Roswell, GA

• A major transportation hub and a strong economy, with a diverse job market across various industries.
• A relatively low cost of living, compared to other major Southeastern cities.
• A thriving culinary scene, vibrant arts and culture, and a welcoming atmosphere for newcomers.
• Easy access to nature and outdoor recreation with nearby parks and the Appalachian Mountains.

Greensboro-High Point, NC

• An affordable cost of living and a lower than average housing price point make it an attractive destination for first-time homebuyers.
• A diverse and growing economy with opportunities in various sectors, including manufacturing, healthcare, and education.
• Convenient location with easy access to major cities like Charlotte and Raleigh.
• A strong sense of community and a comfortable suburban lifestyle.

Looking Ahead: Opportunities and Challenges

While the hottest housing markets predicted for 2025 hold enormous promise, it is important to acknowledge that they also face challenges. These markets, like many others across the country, are grappling with issues like rising inflation, supply chain disruptions, and a tight labor market. However, their unique advantages, including strong job markets, increased inventory, and government-backed mortgage programs, seem to be well-positioned to navigate the challenges ahead.

I believe that these markets will continue to attract both domestic and international buyers in the coming years. The strong fundamentals, including favorable demographic trends and a healthy supply of new housing, are a recipe for ongoing growth and development. However, potential buyers should conduct thorough research and due diligence before making any decisions.

Final Thoughts

The hottest housing markets predicted for 2025 are set to become the focal points for real estate investment and growth in the coming years. The Sun Belt region, with its appealing lifestyle, affordability, and government-backed programs, appears to be poised for significant growth. These markets are drawing in younger families, military personnel, and international buyers, creating a dynamic and evolving real estate environment.