In 2025, Zillow predicts that New York City will be the U.S. housing market with the highest demand, with homes selling for under $230,000.

For the second year in a row, Zillow has ranked Buffalo, New York, as the "hottest" real estate market among the 50 most populous U.S. cities.

In 2025, Zillow's top housing markets will be determined by the rate of home value growth and buyer demand. The rankings will take into account predicted price increases, how quickly homes sell, inventory shortages, rising rents, and local job and population growth, using data from various sources such as the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and Zillow's own listing data.

Cities with lower-than-average home prices tend to rank among the hottest places, indicating that buyers are looking for cheaper homes as prices rise.

Despite rising prices in Buffalo, home values remain affordable, with an average of $223,812, significantly lower than the U.S. average of $356,585, according to Zillow's recent data.

The top five hottest markets, aside from Buffalo, Indianapolis, Indiana; Providence, Rhode Island; Hartford, Connecticut; and Philadelphia, are also very hot.

Why Buffalo continues to be No. 1

While affordability is a significant factor in Buffalo's high ranking, other elements also contribute to its standing.

Since the pandemic, over two jobs have been created for every home built in the city, resulting in increased competition and higher home prices due to the mismatch between job growth and new construction.

According to Zillow's report, new jobs lead to increased competition and higher prices unless builders can meet the additional demand. This is evident in Buffalo, where demand persists despite a limited supply.

Despite a predicted slower growth in the U.S. housing market in 2025, the city's robust economy and limited supply of homes have kept it at the top of Zillow's rankings.

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