New Study Reveals Where Housing Market Could Boom In 2025

With interest rates finally coming down (thanks to this Federal Reserve interest rate committee) chances are good that the housing market will slowly begin to heat up in 2025. For would-be home sellers this could be an important lifeline. Realtor.com's senior economist, Ralph McLaughlin, explained in the website's November 2024 housing report, "We find that high rates in November had led to the slowest market since January of this year and the slowest November in five years." On top of this, houses that were listed ended up spending an average of 62 days on the market, which was the longest in any November since 2019 and 11 days longer than 2023. However, this is slightly less than the average time it took to sell a home as of September of this year.

While estimates show that home sales will only rise modestly in 2025 (Realtor.com predicts 1.5%) certain cities could be facing a more significant housing boom than others. A new report, from GOBankingRates, specifically looked into the statistical growth of select U.S. cities from 2023 to 2024, factoring in important housing factors like migration, job market expansion, housing supply, and even infrastructure developments, to determine the top 20 housing markets that are most likely to experience significant home value growth in 2025. Whether you're looking to sell in these cities, or buy into them, it can be especially important to know what kind of price increases might be coming in order to better prepare you for the buying and/or selling process.

Of the top 20 cities listed in GOBankingRates' report, 14 were located on the East Coast (with 7 in New England specifically). The other 7 cities were scattered among New York, New Jersey, and Pennsylvania. Looking at the New England cities on the list, Hartford, Connecticut was the top city most likely to experience significant housing growth in 2025. The 2024 average home value in Hartford was $365,085, which represented a 9.43% (or $31,460) increase compared to 2023 home values. This gives a good indication that the city will be facing similar home value increases in 2025. New Haven, Bridgeport, and Norwich, Connecticut all also ranked among the top 20, with each boasting an over 8% increase in home values in 2024 when compared to 2023. Other New England cities heading for increased home values are Manchester, New Hampshire, Providence, Rhode Island, and Worcester, Massachusetts.

In New York state, Utica, Rochester, Binghamton, and Syracuse all made the list with Syracuse actually coming in second overall for home value growth in 2024. The city experienced a 10.75% change in the average home value, representing an increase of about $23,000. Finishing out the East Coast markets were Atlantic City and Trenton, New Jersey (with increases of 8.62% and 8.58% respectively) as well as Scranton, Pennsylvania (with a 7.43% or $14,688 increase in home values in 2024). Keep in mind that, depending on the individual housing market, some of these home value increase percentages could represent significantly more money or less than other markets.

For those not interested in moving to the East Coast, there are several cities in both the Midwest and West Coast that could also be facing housing booms in 2025. For starters, the city with the highest increase in home values in 2024 compared to 2023 was actually Rockford, Illinois, located about 90 minutes from Chicago. However, as previously stated, given the smaller market in Rockford, despite the city boasting a 10.89% one-year increase in home values, this only represents a roughly $11,000 increase in home values. Other Midwest cities on the list include Youngstown, Ohio; Green Bay, Wisconsin; and Kingsport, Tennessee which all experienced an over 7% increase in their respective home values.

On the West Coast, San Jose, California experienced a 10.71% home value increase in 2024 compared to 2023, which amounted to an increase of about $151,000 in home values. Further down the coast, San Diego boasted an 8.03% increase (or about $70,000). Remember that even if you're located in one of these cities and looking to sell, there can still be certain times of year that are better for selling than others. Also, before deciding to sell (or buy) it's important to keep an eye on current mortgage rates and to understand that mortgage rates do not directly follow the federal funds rate. There is often a delay between the Fed's federal rate decisions and the rates consumers are able to get, so it could still be worth waiting until you can get a rate you can afford.