Zillow Ranks Providence #3 Hottest Housing Market in the U.S. for 2025

Zillow Ranks Providence #3 Hottest Housing Market in the U.S. for 2025

Providence will be the 3rd hottest major housing market in 2025 in the United States, according to a new analysis by Zillow. Relative affordability and few homes for sale are common threads among what should be the most competitive markets for buyers this year. 

The top three are Buffalo, Indianapolis and Providence on Zillow's 2025 list of hottest housing markets, where competition among buyers will be strongest.

"Construction that keeps pace with an area's growth remains a crucial piece of keeping homes available and accessible. In chilly Buffalo, competition among buyers will remain hot, with employment growing far faster than builders are adding homes," said Skylar Olsen, Zillow chief economist. "Shoppers nationwide should see more options for sale than in recent years, along with slow and steady price growth. That's the good news. But both buyers and sellers should expect unpredictable mortgage rates."

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The "hotness" ranking of the nation's 50 most populous metros takes into account Zillow's forecast for local home value growth and how quickly homes are selling. It also considers job growth per new home permitted and expected growth in owner-occupied households. 

Zillow forecast Buffalo to be the hottest market in 2024, and that prediction proved prescient. Sellers held a strong advantage in negotiations there throughout last year, according to Zillow's market heat index.

Buffalo has the most new jobs per new home permitted — a measure of expected demand. New jobs often mean new residents, which raises competition and drives up prices unless builders can match the additional demand.

 

 

"Although affordability has improved slightly compared to last year, it's still top of mind for buyers. Lower-than-average home prices and rent costs in Buffalo as well as Midwest metros like Indianapolis, St. Louis and Kansas City have bolstered demand in these areas, helping push them to the top of the list," according to Zillow.

Zillow added, "Relative affordability is a powerful force, too. Nearby alternatives to expensive Northeastern metros like New York and Boston dominated Zillow's list of the most popular cities among home shoppers in 2024. Metropolitan areas in the same vein — Providence, Hartford and Philadelphia — rank high on this list as well."

Hartford, Providence, Indianapolis and Charlotte are all among the top five in Zillow's forecast for home value appreciation in 2025. Hartford leads the pack with 4.2% expected growth. But home value growth is set to largely level out this year — even these standout metros look tame compared to the double-digit annual appreciation seen in 2021 and 2022, according to Zillow.