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Monday, January 13, 2025

The Lock-In Effect Is Real

 More Than 80% of Mortgages Have a Sub-6% Rate—and These Homeowners Aren’t Selling Anytime Soon

By Kiri BlakeleyJanuary 10, 2025

The Lock-In Effect Is Real: More Than 80% of Mortgages Have a Sub-6% Rate—and These Homeowners Aren’t Selling Anytime Soon

New York City school teacher Joann Mariani had no idea how extraordinary her timing was when she was shopping for a home in summer 2021.

In the thick of the COVID-19 pandemic—when lockdowns, face masks, and vaccines were common—she was looking for a new place to live in the upper Hudson Valley. At the time, mortgage rates had dipped to an astonishingly low 2% to 3%.

“It was a perfect-storm hot market,” says Mariani.

Competition was fierce due to pandemic-fueled migration shifts from urban centers, but savvy buyers also wanted to take advantage of these low rates.

When Mariani found her dream house—a three-bedroom, 1,046-square-foot home on Larchmont Road in Carmel, NY—she did not hesitate.

“I thought, ‘I better lock down this rate,'” she says.

In summer 2021, New York City school teacher Joann Mariani locked in a historically low mortgage rate below 3%.

(Joann Mariani)

To do so quickly, she bid $10,000 over the $265,000 list price. She also skipped applying for an FHA loan, instead cleaning out an old Roth IRA, withdrawing $75,000 for the down payment and closing costs and an additional $26,000 in taxes.

It was one of the best financial decisions she ever made, she says.

“Three months later, rates skyrocketed,” she adds. “A friend of mine bought a house near me the following year. Hers is only $4,000 more, but she’s paying $500 more a month.”

Since then, her home has seen a 36% appreciation, worth an estimated $100,000 more today than at purchase.

With her $8,354 annual property tax, home insurance, and mortgage, Mariani pays $1,851 a month, saving $450 per month from the rent she was paying for a three-bedroom home in the Bronx.

Extraordinary conditions

Mariani isn’t alone in her mortgage savvy. She and other homeowners who locked in low rates are holding on for dear life. This has created a lock-in effect for homeowners who are reluctant to trade in their low-rate mortgages for today’s higher ones.

In the third quarter of 2024, 21.3% of outstanding mortgages had an interest rate below 3%, according to the latest report from Realtor.com®.

The Freddie Mac fixed rate on a 30-year loan dipped below 3% in July 2020, and generally stayed below that threshold through September 2021, just when Mariani was closing on her dream home.

Highlighting how extraordinary these conditions were, this was the only period in the data’s history (back to 1971) when rates dropped below 3%. 

The lock-in effect

After roughly four months of improving mortgage rates, the tides have turned and rates are near 7% once again.

Mortgage rates reached a recent low of 6.08% in late September, but jumped to a six-month high of 6.93% for the week ending Jan. 9, according to Freddie Mac.

This is keeping many would-be sellers locked in and hindering total inventory recovery.

Of the outstanding mortgages, 83% are still below a 6% rate and 21.3% are below a 3% rate. 

Roughly a third (33.9%) of outstanding mortgages have an interest rate between 3% and 4%, 18.1% have a rate between 4% and 5%, 9.5% have a rate between 5% and 6%, and 17.2% have a rate of 6% or greater.

Based on the recent mortgage rate report from Jan. 9, Freddie Mac revealed mortgage rates jumped to a six-month high of 6.93%, up from 6.91% last week.

Market conditions for the year ahead

For 2025, Realtor.com is forecasting that by the end of the year, the share of mortgages below 6% could fall close to 75%. Put differently, the share of mortgage holders with a rate of 6% or higher could increase by roughly 8 percentage points.

A recent Realtor.com survey revealed that a sizable 40% of potential buyers would find a home purchase feasible if mortgage rates were to drop below 6%, and 32% of buyers would be willing to participate if rates dropped below 5%. 

Easing inflation and mortgage rates will be key drivers of seller activity, which will relieve some of the high price pressure and competition felt in today’s under-supplied market

But it remains to be seen whether the Joann Marianis of the country, those with rates under 3%, will ever want to cash in.

“The thought of a home as a financial asset wasn’t even a consideration,” she says.

Instead, she says, she craved “freedom”—the ability to do what she wanted with her space and not be under a landlord’s rules.

“It was about leaving the city at the end of the day and having some quiet and green space. It was about not having to stress about putting nails in the wall to hang things, or how many cats I could foster. So freedom was probably the main reason for wanting to own.”

That doesn’t mean she’s not grateful for her low rate. “I had the right idea at the right time,” she says.


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Friday, January 10, 2025

NAR: Young Buyers Still Fenced Out of Ownership

 By Jessica Lautz

Young adults face delays in homeownership due to high prices and interest rates, and low inventory, with first-time buyer rates at record lows.

CHICAGO — Today's young adults continue to face delays in homeownership compared to past generations at the same age. Not only is the homeownership rate lower for those under 35 today compared to past generations, but the first-time buyer share is lower, and the age of first-time buyers is older than seen historically. Let's break down these data points.

When looking at the U.S. population by age group, one can visually see that Millennials are the largest generation of Americans, which should translate into the largest generation of home buyers. Millennials (ages 26 to 44 in 2023) alone represent nearly 86 million Americans. This compares to 60.7 million Gen Xers and 64.1 million baby boomers. Represented on the first red line is the age of 38, which is the median age of today's first-time home buyers (the second red line is the age of 61, which is the median age of repeat buyers).

Bar graph: U.S. Population by Age in 2023

The age of first-time buyers today is the oldest seen since NAR first started collecting data on the age of buyers in 1981. Historically, a first-time buyer has been between the ages of 28 and 33. This represents a decade of lost housing wealth gains for homeowners. It also could mean one less move for a homeowner as they are purchasing at a later age. Thus, a home buyer could skip their starter home and move straight into a home that could fit their needs for the coming future.

Line graph: Median Age of Home Buyers, 1981 to 2024

Simultaneous to the jump in ages, the share of first-time buyers continues to lag at historic lows. The annual share of first-time buyers is currently at 24%, while the historical average was at 40% of all primary residence buyers dating to 1981. Certainly, low housing inventory, which has slowly increased, is a factor holding back buyers. In the last year, mortgage interest rates also hit a two-decade high, which further eroded housing affordability. In 90% of metro areas, home prices are rising.

Even among successful first-time buyers, a number have debts holding them back from saving for a down payment. Among those who said saving for a down payment was difficult, the most cited hurdles were high rent (49%), student loans (40%), credit card debt (36%), and car loans (33%). It is important to note that many of these expenses were being tackled during a high inflation environment, so it is unsurprising that 63% of first-time buyers cite the need to make financial sacrifices to purchase a home successfully.

Nearly one-third of first-time buyers this year had student loan debt. This is worth highlighting, as student loan debt payments for federal student loans resumed in October 2023, exacerbating household expenses for many young adults. A smaller share of first-time buyers cites child care costs as a hurdle, at 11%. However, overall, the cost of child care has increased and, in 2023, can range from $20,000-$28,000 annually per child, depending on the child's age and type of care setting. 

Line graph: First-Time Home Buyers, 1981 to 2024

So, with that picture, what is the homeownership rate for those under 35 (the U.S. Census provides a consistent reading of the homeownership rate by age, though this does not match directly to generations)? When looking at the Census homeownership rate data, there have been positive reports that the rate improved for those under 35. This is true. From 2021 to 2022, the homeownership rate did improve; however, in 2023, there was a decline. If one compares the homeownership rate from 1982 to today and then separates the data by generation, it does not tell as positive of a story. For baby boomers and Gen Xers, the average homeownership rate for those under 35 was 39.7%. Unfortunately, neither Millennials nor Gen Zers have yet to reach that number.

Bar graph: Homeownership Rate Under the Age of 35, 1982 to 2023

It is essential to note that this snapshot does not tell the whole story. The young adult generation is diverse. The following blog will look at who purchases homes and the increased share of young adults purchasing homes with all-cash purchases and large down payments. Who are these high-income, wealthy young home buyers? Keep watching this space for the upcoming analysis.

© 2024 National Association of Realtors® (NAR)

Thursday, January 9, 2025

Florida Consumer Sentiment Continues to Climb

 Florida’s consumer sentiment has seen a notable positive shift, rising nine points in the last couple of months, a UF analyst said.

GAINESVILLE, Fla. — Consumer sentiment among Floridians soared in December to 86.4, its highest level in more than four years, jumping 5 points from a revised figure of 81.4 in November. Meanwhile, national consumer sentiment rose 2.2 points, continuing its fifth consecutive monthly increase.

“As the year ends, Florida’s consumer sentiment has seen a notable positive shift, rising nine points in the last couple of months. Notably, all three forward-looking components of the index are at their highest levels in nearly five years. The previous highs for each component were recorded in February 2020, just before the pandemic began. At that time, Florida’s unemployment rate was nearing historically low levels, and consumer sentiment was at its highest point in nearly two decades,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Among the five components that make up the index, four showed an increase and one decreased.

Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago decreased slightly – nine-tenths of a point from 61.9 to 61. These views were divided among sociodemographic groups, with women and people younger than 60 expressing more favorable opinions. In contrast, opinions as to whether this is a good time to buy a major household item, like an appliance, increased 7.7 points from 65.2 to 72.9. Notably, this positive view was shared by all Floridians and was particularly strong among people with an annual income under $50,000.

“Inflation has cooled, but interest rates remain high. Nonetheless, with expectations of new import tariffs from the upcoming administration, it’s not surprising that consumers see now as a good time to purchase big-ticket items, anticipating price changes due to potential tariffs,” said Sandoval.

Floridians’ opinions about future economic conditions were positive with all three components rising this month. Expectations of personal finances a year from now increased 6.6 points from 95.9 to 102.5. Expectations about U.S. economic conditions over the next year saw the largest increase, rising 8 points from 91.1 to 99.1. Meanwhile, the outlook of U.S. economic conditions over the next five years increased 3.2 points from 93.1 to 96.3. These positive expectations were shared by most Floridians, except for women, who expressed more pessimistic views about the nation’s economic outlook over the next five years.

“Although the state’s unemployment rate rose slightly by one-tenth of a percentage point, to 3.4%, Florida’s labor market remains resilient, with total non-agricultural employment surpassing 10 million in November for the first time. This combination of consumer optimism, a strong labor market, and the additional interest rate cuts in December points to encouraging economic prospect, setting a steady course for the economy in the coming year as the new federal administration takes office,” said Sandoval.

“However, looking ahead, there are several challenges. While inflation has cooled, it remains above the Fed’s 2% target, which is likely to slow interest rate cuts next year, keeping borrowing costs high for a longer period. Moreover, the potential for trade tariffs under the incoming administration is something to watch, as they could make imported goods more expensive for businesses and consumers, thereby increasing inflationary pressure. Monitoring consumer sentiment will be crucial to gauge how consumers feel about the economy as we move into 2025,” Sandoval added.

Conducted November 1 to December 23, the UF study reflects the responses of 267 individuals who were reached on cellphones and 282 individuals reached through an online panel, a total of 549 individuals, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

Source: University of Florida

© 2025 Florida Realtors®

Redfin: Many Homeowners Say They’ll Never Sell

 Nearly 40% of homeowners who don’t plan to sell anytime soon say it’s because their home is almost or completely paid off.

SEATTLE — More than one-third (34%) of U.S. homeowners say they’ll never sell their home, and another 27% say they wouldn’t consider selling for at least 10 years, according to the real estate brokerage Redfin.

Roughly one-quarter (24%) of homebuyers plan to sell in five to 10 years, while just 8% plan to sell in three to five years and 7% within the next three years.

Broken down by generation, older homeowners are more likely than their younger counterparts to say they’ll never sell. More than two of every five (43%) baby boomer homeowners say they’ll never sell, compared to 34% of Gen X owners and 28% of millennial/Gen Z owners.

The fact that the lion’s share of homeowners say they’ll never sell is one reason new listings are below pre-pandemic levels in much of the country, though listings have started ticking up in recent months. A recent Redfin analysis found that just 25 of every 1,000 U.S. homes changed hands in the first eight months of 2024, the lowest turnover rate in decades.

Homeowners are staying because their home is paid off, or they just don’t want to move

Nearly two in five (39%) homeowners who don’t plan to sell anytime soon say it’s because their home is almost or completely paid off, making that the most commonly cited reason. Homeowners who have paid off their mortgage are motivated to stay put because it means they own their home free and clear and get to live there while paying only for things like property taxes and HOA fees. Almost as many respondents (37%) said they’re not selling because they simply like their home and have no reason to move.

Affordability is another major reason homeowners are hesitant to sell. Nearly one-third (30%) of respondents said they’re staying in their current home because today’s home prices are too high, and 18% don’t want to give up their low mortgage rate. This survey question was asked to respondents who have owned their home for at least six years and have no intention of selling within the next five years.

Housing costs have risen significantly since before the pandemic; home prices are up roughly 40% since then, and the weekly average mortgage rate is 6.91%, up from just under 4% in 2019. A recent Redfin analysis found that more than 85% of U.S. homeowners with mortgages have an interest rate below 6%.

“The just-because movers — those who just want a bigger or nicer house — are staying put, mostly because it’s so expensive to buy a new house,” said Marije Kruythoff, a Redfin Premier agent in Los Angeles. “The people who are selling are doing so because they need to. Either they’re relocating to a different part of the country, or they’re moving due to a major life event like having a baby or taking a new job on the opposite side of the city.”

This is according to a Redfin-commissioned survey conducted by Ipsos in September 2024. The survey was fielded to 1,802 U.S. residents aged 18-65.

Source: Redfin

© 2025 Florida Realtors®

Monday, January 6, 2025

Fast-Growing Florida Tops 23.3M People

 By Jim Saunders

Census Bureau data shows Florida’s population boom reflects two key issues: international migration and population increases in the South.

TALLAHASSEE, Fla. — Growing faster than almost any other state, Florida’s estimated population topped 23.3 million people this year, according to data released Dec. 19 by the U.S. Census Bureau.

The Census Bureau estimated that Florida had 23,372,215 people as of July 1, up from 22,904,868 a year earlier. Florida’s increase of 467,347 people was second only to Texas, which gained 562,941.

Also, Florida’s 2% growth rate trailed only the District of Columbia, which had a 2.2% rate, according to the Census Bureau. Texas and Utah each had 1.8% growth rates.

The estimated national population increased 1% to 340.11 million.

Florida’s growth reflected two key issues in the Census Bureau data: international migration and population increases in the South.

A news release accompanying the data said net international migration “was the critical demographic component of change driving growth in the (U.S.) resident population. With a net increase of 2.8 million people, it accounted for 84% of the nation’s 3.3 million increase in population between 2023 and 2024.”

The Census Bureau said Florida, California and Texas had the largest gains from net international migration, with Florida showing a 411,322-person increase.

The news release also said the South added more people from July 1, 2023, to July 1, 2024, than all other regions combined. It said the overall population in the South increased by nearly 1.8 million people.

“The largest contributing component to this growth was international migration, which added 1.1 million people,” the Census Bureau said. “Domestic migration netted another 411,004 residents. The South was the only region with positive net domestic migration, where the number of people entering the region exceeded those leaving. Natural increase also contributed 218,567 to the growing region.”

Natural increase is a measure comparing births and deaths. While Florida saw large overall population growth, it was one of 17 states that had more deaths than births, with a 7,321 “natural decrease,” the Census Bureau said.

State economists also pointed to such a decrease in a July report that projected Florida’s population over the coming decade.

“Natural increase is expected to remain negative throughout the forecast horizon as deaths continue to outpace births,” the report by a state panel known as the Demographic Estimating Conference said.

The state report estimated Florida had a population of 23 million people on April 1, with the total estimated to increase to 25.7 million in 2034. State and Census Bureau estimates have differed in the past, at least in part because of their methodologies.

The state report estimated Florida would add 319,109 net new residents from April 2024 to April 2028, saying such increases “are analogous to adding a city slightly smaller than Orlando, but larger than St. Petersburg every year.”

The new Census Bureau data showed Florida solidly in third place behind California and Texas in overall population. Florida is followed by New York, Pennsylvania, Illinois, Ohio, Georgia, North Carolina and Michigan.

The Census Bureau said three states, Vermont, Mississippi and West Virginia, had slight population decreases from July 1, 2023, to July 1, 2024.

©2024 The News Service of Florida. All rights reserved.

Top Housing Markets for 2025

Realtor.com 

As noted in our 2025 National Housing Forecast, at a national level, we expect that housing inventory will continue to improve as gradually dropping mortgage rates and time help to ease the lock-in effect on existing homeowners and builders continue to ramp up production, building homes to fill the large housing deficit. While nationwide home sales are expected to edge just slightly higher amid moderating home price growth, some markets across the country are projected to see much stronger growth in both sales and prices in 2025. Across these markets, we find a number of unifying themes:

  • Regional concentration in the South and West;
  • Considerable recent sales growth and likelihood of maintaining that momentum;
  • More abundant inventory, in many cases driven by new construction;
  • Younger populations, many of whom are connected to the military or have international ties;
  • Factors that minimize the impact of high mortgage rates, such as higher shares of outright homeownership (no mortgage debt) and populations eligible for government-backed mortgage loans like Veterans Affairs (VA) and Federal Housing Administration (FHA) loans; and
  • Relatively lower-cost markets that continue to benefit from flexible work arrangements.

The Sun Belt stays on top

The top 10 markets for 2025 are exclusively in the South and West, with multiple markets from three states—Texas (No. 4 El Paso and No. 7 McAllen), Florida (No. 2 Miami and No. 6 Orlando), and Virginia (No. 3 Virginia Beach and No. 5 Richmond)—rising to the top of the list. Other states with markets in the top 10 include Colorado (No. 1 Colorado Springs), Arizona (No. 8 Phoenix), Georgia (No. 9 Atlanta), and North Carolina (No. 10 Greensboro).

 

We ranked the 100 largest metros by their summed expected sale and price growth rates. These are the top 10 metropolitan areas that surfaced for 2025:

 Why are these markets in the top 10? From a technical standpoint, they make the list because we forecast these markets to be the leaders in home sales and price growth in 2025 across the 100 largest markets.

Going beyond the technicalities, however, shows us a correlation between the 2025 percentage increase in home sales across these markets and the 2025 home sales forecast relative to a market’s 2017–19 home sales average.

In simpler words, the markets we’re forecasting to lead the country in home sales in 2025 are markets that have better recovered to their pre-COVID-19 levels of home sales, and we expect them to hold that momentum in the year ahead. 

 We’ve dug even deeper into what separates our top markets from the rest of the pack—and have surfaced several key findings. Not only are these more-recovered sales markets with an ability to expand on that momentum, but they are also areas where the availability of housing inventory creates opportunity. Although affordability is still stretched for many households in these markets, as is the case just about everywhere, aspiring homeowners can create opportunities and access homeownership as a result of government-backed loan programs that enable lower down payments. These programs are particularly valuable to the younger families with military and international connections that call these top markets home.

Buyers have options–both new and existing homes for sale

Nationwide, the recovery of housing inventory is well underway, with the number of homes for sale in November notching the highest mark since December 2019. Still, this remains a glass half-empty or half-full story. Despite the significant gains to date, nationwide, the housing market still trails the 2017 to 2019 average for November by 20%.  Further, as we’ve pointed out in our monthly Housing Trends report, there is notable regional variation in the inventory recovery, with the South and West generally far closer to pre-pandemic inventory levels than the Midwest and Northeast. This is undoubtedly a factor propelling home sales growth in the top markets, half of which have active listing counts above 2019 levels in the most recent data.

New construction is an important part of the story. Eight of the top 10 metros have seen year-over-year growth in terms of single-family home permits issued year to date. While many of these same areas have seen declines in total permits issued as multifamily building lags, single-family permits are what matter most for the owner-occupied housing market as the vast majority of multifamily units will ultimately be rentals whereas single-family homes are generally sold to owner-occupants. Nationally, new-construction listings make up 17.3% of the listings on Realtor.com®. All but two of the top 10 markets (Miami and Phoenix) are near this mark or better.

Responding to the lack of affordability in the housing market, homebuilders have recently focused on smaller homes to meet demand. In half of the 2025 Top Housing Markets, new-construction prices have fallen in the past year, but in top markets in Florida, Virginia, and North Carolina, new-construction home prices continue to climb.

But new-home construction is not the only part of the story. A recovery of existing-home sellers in these markets seems to be giving home shoppers a variety of choices that is helping to propel sales. In fact, despite the uptick in single-family home construction in these top markets, the share of new-construction home listings in 8 of the top 10 markets has fallen as a recovery in existing-home sellers balances the uptick in new homes for sale. 

 

Home to younger families with military and international connections 

Younger households are far more common in these top 10 markets. All except Miami have an above-average share of households under age 35. Further, most of these areas also over-index on prime-working-aged households, with above-average shares of households in the 35–54 range, as well. Perhaps not surprisingly, households in these top markets are also more likely than the typical U.S. household to have children.

On average, 28.8% of households in top markets have children, compared with 26.5% nationwide. McAllen (38.2%) drives up the average, but 7 of the top 10 markets, including Colorado Springs (27.8%), Virginia Beach (27.2%), El Paso (33.8%), Orlando (27.2%), Phoenix (27.7%), and Atlanta (29.3%), all have an above-average share of households with children. Although the share of homebuyers with children at home has declined, life changes such as marriage, additions to the family, children moving out, and retirement continue to be a top reason households say that they would move.

Among the top 10 metros, households are more likely to be connected to the military. Among the 100 largest metros, roughly 1 in 8 households is an active-duty or veteran household, while among the top markets, the average is more than 1 in 7.

In Colorado Springs (31.4%) and Virginia Beach (31.5%), the share of military households is nearly 1 in 3. They are followed by El Paso (18.8%), Richmond (13.7%), and Phoenix (13.6%). This connection may affect the housing market in two key ways. First, active-duty military families tend to move more often, on average every two to three years. Second, active-duty military and veterans might be eligible for VA mortgage loan benefits, which play an important role in enabling homeownership.

Another common theme found in these markets is residents’ international connection. On average, 17.6% of residents in the top markets are foreign-born, ranging from a low of 6.8% in Colorado Springs and Virginia Beach to a high of 42.7% in Miami. The share of foreign-born in the top 10 markets is 4.6 percentage points higher than the average share in the 100 largest markets. El Paso (22.5%), McAllen (25.8%), and Orlando (21.9%) also see a high share of foreign-born residents. Perhaps because of the international connections of current residents, these areas also attract international home shoppers. Notably, El Paso and McAllen received 6 times and 5 times the international view share of an average top-100 market, respectively. Meanwhile, Miami’s international view share was 2.5 times that of the average top-100 market. Colorado Springs, Virginia Beach, and Phoenix also each recorded a higher share of international traffic than the top-100 metro average in the year ending in August 2024.

 

Outright ownership insulates some markets from the drag of still-high mortgage rates

McAllen is one of just two of the 100 largest housing markets where a majority of homeowners (61.7%) own their home without a mortgage. Among the top 10 markets, El Paso (49%), Miami (43.8%), and Greensboro (38.2%) are also areas where an above-average share of households own their home outright, without a mortgage. Lower shares of homeowners with mortgage debt means that the mortgage rate lock-in effect has less bearing on homebuying and selling decisions in these areas in the aggregate. Nationwide, our 2025 Housing Forecast anticipates that the mortgage rate lock-in effect will ease in 2025, but still be a limiting constraint for many households. 

 

While government mortgages create opportunities in other top markets

However, in the remaining six markets, a larger than average share of homeowners carry a mortgage, with Virginia Beach (71%) and Colorado Springs (70.7%) leading the way.

Notably, government-backed lending, including Veterans Affairs (VA) mortgages, Federal Housing Administration (FHA) mortgages, and United States Department of Agriculture (USDA) mortgages, is more prevalent in markets expected to see top sales and home price growth in 2025. More than half of mortgages were government loans in Colorado Springs, El Paso, and Virginia Beach due to high VA loan usage. Almost 3 in 4 mortgage loans were government loans in El Paso, with 29.3% VA loans and 41% FHA loans.

One key advantage of government-backed mortgages is that they permit lower down payments (in the case of VA and USDA loans, as little as 0%) while FHA loans generally require a minimum 3.5% down payment. Because government-backed mortgages are more frequently used in these markets, the average down payment as a share of home price is lower than the national average (14.3%), and in three markets—Virginia Beach, El Paso, and McAllen—the combination of lower down payment shares and lower-priced homes means that the typical recent down payment was less than $10,000.

 

Flexible work benefits relatively lower-cost markets

Flexible work arrangements, including hybrid and fully remote options, continue to be appealing to homebuyers who will see only a modest improvement in overall affordability in 2025. A previous study by Realtor.com revealed that many home shoppers leverage flexible work modes to address affordability challenges, and we expect that trend to continue.

According to WFH Data, half of the top markets, including Richmond (11.8%), Atlanta (10.8%), Phoenix (10.6%), Colorado Springs (8.9%), and Orlando (8.8%), have a higher share of fully remote or hybrid online job postings in 2024 compared with the average share across the top 100 metros (8.6%). While markets like Virginia Beach (7.8%) and Greensboro (6.1%) have a lower share of remote or hybrid job postings, these areas have a price advantage over nearby metros such as Washington, DC (17.8%), Raleigh (13.4%), and Charlotte (9.1%) that offer more abundant flexible job opportunities. The combination of relative affordability and moderate proximity for an occasional commute is likely to benefit these top housing markets.

While the top markets on average have a lower price point than the top-100 market average or the U.S. median, they are found in areas with relatively lower incomes. As a result, despite their lower costs, the typical share of income required to afford a home in the top markets is expected to be 31.1%, slightly higher than the national average of 29.2%. Miami is on the high end of the range, at 42.1%, while Greensboro is on the low end, at 25%. 

 

Although housing affordability is not better than average, the top markets do offer a somewhat lower cost of living than the national average. The most affordable market is McAllen, where the typical cost of necessities is about 13% below the national average, according to a Realtor.com analysis of regional price parities (RPPs) data from the Bureau of Economic Analysis. On the other end of the spectrum is Miami, where the cost of living is about 11.5% higher than the national average. Overall, 7 of the top 10 markets are more affordable than the U.S. in terms of cost of living.

Realtor.com® 2025 Housing Forecast–100 Largest U.S. Metros (Ranked)

RankCbsa Title2025 Existing Home Sale Counts Year-over-Year2025 Existing Home Sale Counts vs 2017–19 Average 2025 Existing Home Median Sale Price Year-over-Year2025 Existing Home Median Sale Price vs 2017–19 Average Combined 2025 Existing Home Sales and Price Growth
1Colorado Springs, Colo.27.1%-5.6%12.7%88.9%39.8%
2Miami-Fort Lauderdale-West Palm Beach, Fla.24.0%-0.7%9.0%100.5%33.0%
3Virginia Beach-Norfolk-Newport News, Va.-N.C.23.4%24.5%6.6%57.3%29.9%
4El Paso, Texas19.3%1.3%8.4%71.1%27.8%
5Richmond, Va.21.6%31.7%6.1%68.8%27.6%
6Orlando-Kissimmee-Sanford, Fla.15.2%32.1%12.1%82.6%27.3%
7McAllen-Edinburg-Mission, Texas19.8%18.4%7.0%47.5%26.8%
8Phoenix-Mesa-Scottsdale, Ariz.12.2%19.1%13.2%76.1%25.5%
9Atlanta-Sandy Springs-Roswell, Ga.15.1%-7.7%10.2%51.9%25.3%
10Greensboro-High Point, N.C.17.3%11.0%7.7%51.6%25.0%
11Tucson, Ariz.12.5%0.1%12.4%40.3%24.8%
12Austin-Round Rock, Texas14.5%-7.4%10.2%89.1%24.7%
13Durham-Chapel Hill, N.C.14.1%-7.8%10.1%102.0%24.2%
14Charlotte-Concord-Gastonia, N.C.-S.C.15.7%-11.2%8.4%92.6%24.1%
15Little Rock-North Little Rock-Conway, Ark.18.6%7.3%4.8%49.6%23.4%
16Jacksonville, Fla.13.5%7.6%9.8%69.6%23.3%
17Cape Coral-Fort Myers, Fla.13.2%5.7%9.6%64.2%22.8%
18Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.17.0%-7.9%5.0%94.1%22.0%
19Harrisburg-Carlisle, Pa.16.8%-15.5%5.1%64.3%21.9%
20Denver-Aurora-Lakewood, Colo.13.6%6.9%8.0%89.3%21.6%
21Lakeland-Winter Haven, Fla.10.6%20.8%10.3%32.6%20.9%
22Tampa-St. Petersburg-Clearwater, Fla.9.1%-3.4%11.8%98.7%20.9%
23Allentown-Bethlehem-Easton, Pa.-N.J.12.3%-16.2%8.0%97.7%20.4%
24Columbia, S.C.12.1%-13.7%8.2%47.1%20.3%
25Riverside-San Bernardino-Ontario, Calif.11.4%-1.6%8.8%82.5%20.2%
26Urban Honolulu, Hawaii13.4%-3.7%6.7%63.7%20.1%
27Augusta-Richmond County, Ga.-S.C.14.2%-24.7%5.8%115.2%20.0%
28San Antonio-New Braunfels, Texas10.9%-28.5%9.1%80.7%20.0%
29Akron, Ohio15.0%1.9%4.2%76.5%19.2%
30Seattle-Tacoma-Bellevue, Wash.12.2%21.7%6.9%72.1%19.0%
31Baltimore-Columbia-Towson, Md.16.2%-16.0%2.7%78.8%18.9%
32Memphis, Tenn.-Miss.-Ark.8.3%-27.4%10.5%52.5%18.8%
33Deltona-Daytona Beach-Ormond Beach, Fla.7.2%-61.2%11.5%65.7%18.7%
34Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.12.3%-9.2%6.1%70.4%18.3%
35Buffalo-Cheektowaga-Niagara Falls, N.Y.9.7%-0.7%8.5%60.3%18.2%
36Springfield, Mass.11.0%-0.8%6.8%47.2%17.8%
37Portland-Vancouver-Hillsboro, Ore.-Wash.11.1%-2.6%6.7%100.4%17.8%
38Las Vegas-Henderson-Paradise, Nev.5.5%-8.9%12.3%59.9%17.8%
39Toledo, Ohio10.8%-5.0%6.7%51.2%17.5%
40Scranton–Wilkes-Barre–Hazleton, Pa.11.6%-4.8%5.7%62.5%17.4%
41Albany-Schenectady-Troy, N.Y.10.3%-6.4%6.6%41.8%17.0%
42Winston-Salem, N.C.7.7%-10.3%9.2%76.3%16.9%
43New York-Newark-Jersey City, N.Y.-N.J.-Pa.11.0%-8.7%5.9%55.8%16.9%
44Chicago-Naperville-Elgin, Ill.-Ind.-Wis.12.4%-16.9%4.5%114.7%16.8%
45St. Louis, Mo.-Ill.9.7%-13.0%7.1%76.5%16.8%
46Dallas-Fort Worth-Arlington, Texas7.6%-5.3%9.2%53.0%16.7%
47Salt Lake City, Utah6.7%8.2%10.0%56.6%16.7%
48Oxnard-Thousand Oaks-Ventura, Calif.8.2%-7.5%8.0%54.4%16.3%
49Stockton-Lodi, Calif.6.2%-27.1%9.8%59.7%16.1%
50Bakersfield, Calif.9.9%-13.3%6.0%78.1%15.9%
51Indianapolis-Carmel-Anderson, Ind.7.7%-19.1%8.2%71.3%15.9%
52Rochester, N.Y.8.7%-16.8%6.8%93.6%15.5%
53Cincinnati, Ohio-Ky.-Ind.8.2%4.8%7.3%84.8%15.4%
54Lansing-East Lansing, Mich10.3%-8.7%4.9%65.4%15.2%
55Oklahoma City, Okla.8.4%-6.1%6.6%57.8%15.0%
56Houston-The Woodlands-Sugar Land, Texas7.2%-13.1%7.3%101.9%14.5%
57Cleveland-Elyria, Ohio9.4%-28.1%5.0%82.5%14.4%
58Boise City, Idaho2.0%-11.2%12.3%58.1%14.4%
59Milwaukee-Waukesha-West Allis, Wis.8.6%-17.6%5.7%51.7%14.3%
60Sacramento–Roseville–Arden-Arcade, Calif.5.2%-14.8%8.9%77.3%14.1%
61Greenville-Anderson-Mauldin, S.C.5.1%4.3%8.9%97.8%14.1%
62Ogden-Clearfield, Utah2.2%-12.5%11.8%34.1%14.0%
63Kansas City, Mo.-Kan.6.7%-24.9%6.9%91.9%13.6%
64North Port-Sarasota-Bradenton, Fla.3.2%-28.1%10.4%63.7%13.5%
65Fresno, Calif.8.1%-7.7%5.1%90.7%13.2%
66Charleston-North Charleston, S.C.5.8%-19.7%7.0%46.2%12.8%
67Nashville-Davidson–Murfreesboro–Franklin, Tenn.4.5%-11.7%8.3%60.6%12.7%
68Minneapolis-St. Paul-Bloomington, Minn.-Wis.6.3%-19.3%6.2%90.3%12.5%
69San Francisco-Oakland-Hayward, Calif.4.6%-23.6%7.5%62.0%12.1%
70Knoxville, Tenn.3.7%-22.2%8.3%88.0%12.0%
71Grand Rapids-Wyoming, Mich3.9%-21.4%7.7%65.3%11.6%
72Raleigh, N.C.2.2%-11.0%9.0%114.9%11.2%
73Louisville/Jefferson County, Ky.-Ind.4.6%-16.2%6.1%70.5%10.7%
74San Diego-Carlsbad, Calif.3.4%-27.5%7.3%74.3%10.7%
75Palm Bay-Melbourne-Titusville, Fla.0.8%-15.7%9.6%102.7%10.4%
76Los Angeles-Long Beach-Anaheim, Calif.4.2%-12.3%5.5%54.3%9.7%
77Hartford-West Hartford-East Hartford, Conn.3.8%-17.5%5.6%55.3%9.4%
78Wichita, Kan.3.0%-3.2%6.2%63.9%9.2%
79Worcester, Mass.-Conn.1.2%-8.1%8.0%66.8%9.2%
80Columbus, Ohio3.4%-11.7%5.7%50.8%9.1%
81Tulsa, Okla.2.5%-7.9%6.5%60.5%9.0%
82Detroit-Warren-Dearborn, Mich2.4%-31.3%6.2%96.7%8.6%
83Chattanooga, Tenn.-Ga.2.2%-16.2%6.3%99.9%8.5%
84Syracuse, N.Y.1.7%-1.7%6.7%90.3%8.4%
85Omaha-Council Bluffs, Neb.-Iowa2.5%-35.4%5.8%96.1%8.3%
86Spokane-Spokane Valley, Wash.-0.4%-2.1%8.7%49.3%8.2%
87Baton Rouge, La.5.5%-9.1%2.7%73.4%8.2%
88Des Moines-West Des Moines, Iowa2.7%-20.5%4.9%46.2%7.6%
89New Orleans-Metairie, La.1.7%-27.5%5.9%82.8%7.5%
90Pittsburgh, Pa.1.9%-22.5%4.7%92.9%6.6%
91Dayton, Ohio2.3%-42.2%4.3%103.1%6.6%
92Portland-South Portland, Maine-1.5%-6.4%6.1%86.0%4.6%
93Boston-Cambridge-Newton, Mass.-N.H.-1.8%-30.9%5.6%59.1%3.8%
94New Haven-Milford, Conn.-8.4%29.5%9.7%71.6%1.3%
95Bridgeport-Stamford-Norwalk, Conn.-5.4%-26.8%4.9%57.9%-0.5%
96Madison, Wis.-8.4%-25.0%5.5%37.8%-2.9%
97Birmingham-Hoover, Ala.-8.3%-35.0%2.3%83.4%-6.0%
98San Jose-Sunnyvale-Santa Clara, Calif.-10.3%-43.7%4.0%66.7%-6.3%
99Providence-Warwick, R.I.-Mass.-14.7%-30.0%7.2%51.4%-7.5%
100Albuquerque, N.M.-4.1%-48.0%-4.2%80.5%-8.3%

 

Methodology 

The Realtor.com model-based forecast uses data on the housing market and overall economy to estimate 2025 values for these variables for the 100 largest U.S. metropolitan statistical areas by population size. These markets are then ranked by combined forecasted growth in home prices and sales. Results are calculated to three decimal places and ranked at this degree of specificity; there were no ties. For publication, results are rounded to one decimal place, and this can result in minor differences between the rounded and unrounded sums.