These Will Be the 12 Hottest Housing Markets in 2025, Realtors Predict

“While President-elect Trump can work quickly with his administration to implement some regulatory changes, other policies that will affect housing, such as tax changes and broad deregulation, require the cooperation of other branches and levels of government,” Danielle Hale, Realtor.com’s chief economist, said in a statement.

For the time being, Hale said, a gradual improvement in housing market dynamics is likely, powered by broader economic factors.

“The new administration’s policies have the potential to enhance or hamper the housing recovery, and the details will matter,” she said.

What Buyers and Sellers Can Expect

The forecast predicts that homebuyers, frustrated by higher interest rates, will find some buyer-friendly conditions in 2025, such as the highest for-sale inventory since December 2019 and nearly 20% of listings coming with price cuts.

Although mortgage rates will improve slowly during the year, the drop is unlikely to move the needle back toward a seller’s market, according to the forecast.

Buyers should expect a less competitive housing market than in past years, although one that is still costly because of stubbornly high mortgage rates and home prices.

Realtor.com said limited inventory and strong demand, especially in desirable locations, could mean that sellers still have the upper hand in terms of negotiating prices. However, higher interest rates or slower-than-expected income growth could result in fewer buyers being able to afford homes, which might result in longer selling times or price reductions in some markets.

Key Trends and Wild Cards to Watch 

The 2025 forecast predicts that home sales will increase slightly, with an expected annual count of sales 1.5% more than in 2024, for an annual tally of 4.1 million sales. As mortgage rates ease back in 2025, the market is likely to see slightly more activity during the busier summer months than last year.

Markets are factoring in expectations of a higher-rate environment than previously thought, but uncertainty exists around which policies will take priority and whether the specifics match or merely rhyme with Trump campaign promises. These details will matter for the outlook and for mortgage rates, Realtor.com said.

Although the surge in new multifamily supply offers renters more options, the large renter population will dampen any significant effect on rental prices. The median asking rent in 2025 is expected to be only slightly lower than the -0.1% in 2024.

Looking ahead to 2025, recent construction trends suggest that all four regions of the country will experience continued growth in rental stock, with the South leading at an annual increase rate of 1.5%, followed by 1.2% in the West, 0.9% in the Midwest and 0.7% in the Northeast.

While the forecast expects existing home sales to remain largely unchanged next year, it predicts that new home sales and single-family housing starts will outperform. With a substantial construction deficit over the past decade, builders have room to run and may get an additional boost from a builder-friendly administration that understands the need for more construction.

“While more inventory means buyers will likely have more time to make purchase decisions in 2025, in any market, a fast-acting buyer will have a higher likelihood of making the winning offer,” Hale said. “For this reason, it’s wise to get prepared financially and for the home search overall.”

See the accompanying gallery for the 12 hottest housing markets in 2025 ranked by year-over-year price growth, according to Realtor.com’s forecast, which is a projection for annual median home sales price increase (2025 median existing-home sales price vs. 2024) and annual total home sales increase (total 2025 existing-home sales vs. 2024).