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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 66 January 2025 J O U R N A L NEW FORECAST PINPOINTS 2025'S TOP HOUSING MARKETS R ealtor.com has revealed its Top Housing Markets for 2025, highlighting the areas ready for growth in the year ahead. This year's list highlights markets character- ized by moderately affordable homes, strong inventory—mainly boosted by new construction—and a sizable base of younger families, many with military and international connections. According to Realtor.com, the top 10 markets for 2025 are concentrated in the South and West: 1. Colorado Springs, Colorado 2. Miami-Fort Lauderdale-Pompano Beach, Florida 3. Virginia Beach-Norfolk-Newport News, Virginia-North Carolina 4. El Paso, Texas 5. Richmond, Virginia 6. Orlando-Kissimmee-Sanford, Florida 7. McAllen-Edinburg-Mission, Texas 8. Phoenix-Mesa-Chandler, Arizona 9. Atlanta-Sandy Springs-Alpharetta, Georgia 10. Greensboro-High Point, North Carolina "While nationwide home sales are expected to see a slight uptick this year, driven by a cooling in home price growth, the top markets we've identi- fied are poised for stronger sales and price gains in 2025," said Danielle Hale, Chief Economist at Realtor.com. "With mortgage rates likely to ease only mod- estly next year, these markets—offer- ing relatively lower-priced homes, more new and existing houses to choose from, and mortgage products designed to give buyers a leg up—could provide some would-be buyers a better chance at entering the market next year." Sun Belt Boom Realtor.com's top 10 are all located in the South and West, with multiple markets from three states—Texas, Florida, and Virginia. While these areas generally offer lower home prices than the national average, incomes tend Market Trends to be lower as well. As a result, housing affordability remains a challenge, with buyers spending about 31.1% of their income on housing—higher than the national average of 29.2%. However, seven of the top 10 markets offer a more affordable cost of living compared to the U.S. average, with McAllen, Texas, leading as the most affordable, with living costs 13% below the national average. Miami stands out as the least affordable, with housing costs consum- ing 42.1% of income and a cost of living 11.5% above the U.S. average. Remote Working Situations Come Into Play Along with slightly lower overall liv- ing costs, buyers in many of these markets may also benefit from flexible work ar- rangements; Realtor.com research found many shoppers use flexible work options to navigate affordability challenges—a trend expected to continue. Half of the top markets, including Richmond, Virginia (11.8%); Atlanta (10.8%); Phoenix (10.6%); Colorado Springs, Colorado (8.9%); and Orlando, Florida (8.8%), report higher shares of remote or hybrid job postings in 2024 than the average across the top 100 metros (8.6%), according to WFH Data. Inventory on the Rise While the nation's housing inven- tory remains a challenge, a recovery is underway, with the number of homes for sale in November notching the highest mark since December 2019. Despite those gains, the market still trails the November 2017-2019 average by 20%, with notable regional variation: the South and West are far closer to pre-pandemic levels than the Midwest and Northeast. Among the top 10 metros, eight have seen year-over-year growth in single-family home con- struction, with builders increasingly focusing on more affordable and small- er homes to meet demand. But new home construction is only part of the story—despite increased construction, new home listings have declined as a share of the market in eight of the top 10 markets as more existing homeowners