5 housing markets to watch in 2025 – especially if you’re an investor

Rapid population growth and affordability are fueling some of the hottest markets investors should keep an eye on in 2025.

And Dallas, which saw the largest population growth in 2023, according to the U.S. Census Bureau, has matured as an investor market.

Four other cities – including Miami; Houston; St. Petersburg-Tampa, FL; and Nashville, TN— were ranked high in the Emerging Trends in Real Estate 2025 report from Price Waterhouse Coopers and the Urban Land Institute, which identified five hot markets that buyers and investors should watch in the coming year.

The report looked at various factors, including the current local market, the outlook for home construction and new construction, and the overall real estate outlook to determine the hottest markets.

Sun Belt cities accounted for 13 of the top 20 markets to watch, attracting interest due to their booming economies and relative affordability.

Other popular areas are what PWC/ULI called “18-hour cities,” such as Denver; Charlotte, NC; and Ft. Lauderdale, FL. These cities have not fully developed into markets with amenities and 24/7 access, but they can compete against larger cities due to their relative affordability.

“Supernova cities,” or cities that have seen large growth relative to the overall US population, also rank high on the “markets to watch” list. These cities, which include Austin, TX and Raleigh-Durham, NC, are projected to see 8% population growth over the next five years, compared to the average US population growth of 1.9%.

Here’s what makes Dallas, Miami, Houston, St. Petersburg-Tampa and Nashville particularly attractive to investors,

Median home list price: $434,500
Average monthly rent: $1,475

What is Dallas’ secret weapon? It is a rapid population growth.

“Dallas is one of the best cities for real estate investors in 2025 because of its rapid growth, economic opportunities, business-friendly policies and attractive lifestyle,” says Harrison Polsky, a real estate agent at Douglas Elliman in Dallas. .

Polsky says that’s partly because of the large number of Fortune 500 companies in the area. In 2023, Goldman Sachs broke ground on a $500 million corporate facility that will house over 5,000 employees.

“North Texas’ growing financial presence is second only to New York City,” Polsky says. Plus, the city is known for its relatively affordable housing that can attract families who “price out of coastal metros.”

Median home list price: $535,000
Average monthly rent: $1,227

Steady demand in the Miami area has increased rental and property values.

“Steady demand is driving up rents and property values ​​and offers investors attractive rental yields of around 5% to 7% with potential appreciation near 6% to 8% in sought-after neighborhoods,” says Ron Myers of Ron Buys Florida Homes . in Wellington, FL.

However, Myers warns of some of the potential complications that investors in the area may face. While Floridians benefit from a lack of income tax, they also face higher-than-average insurance premiums and high climate risks.

“Investors focused on high-rise properties or in less flood-prone areas may find better long-term returns despite high insurance costs,” he says.

Median home list price: $369,450
Average monthly rent: $1,375

Nearly 140,000 people moved to Houston between 2022 and 2023 — due in part to the city’s booming health care, tech and green energy sectors. Businesses there benefit from development-friendly policies, including the city’s lack of formal zoning laws.

However, Houston remains relatively affordable, with median home list prices and monthly rent prices below the national average.

“Dallas and Houston are seeing a lot of economic growth, with employment opportunities expanding significantly, largely due to many startups seeing these cities as great places to base their home,” says Seamus Nally, CEO of TurboTenant.

“And when job opportunities increase, so does the population,” adds Nally. “A lot of people are moving to these cities for the opportunities, which is great for investors to get a foot in the door.”

Median home list price: $399,999
Average monthly rent: $1,720

Tampa-St. Petersburg saw a huge influx of population during the COVID-19 pandemic. However, that appears to have slowed, says Robert Washington of Savvy Buyers Realty in St. Louis. Petersburg.

“Many of the prospective buyers I speak to have chosen to wait for mortgage rates to come down before making the move,” he says. “I think a lot of that pent-up demand will start to come back into the market once rates start coming down.â€

From an investment standpoint, the prospect of job growth alone makes it an attractive market, according to Alee Douglass, a broker associate with Premier Sotheby’s International Realty in Tampa.

“With the forecast 2.3 times higher than the country’s five-year forecast, there will be a continued demand for housing and a continued flow of people moving into our area,” she says.

Investors thrive in Tampa-St. St. Petersburg market because of its warm weather and attractive beaches, which attract seasonal residents.

“While we’ve had an increase in short-term rental regulations, there are some areas where they are being enacted and investors are looking to make a significant ROI,” says Douglass.

The area offers vacancies and low rental yields of about 4% to 6%, with projected appreciation at about 5% to 6% in growth neighborhoods, Myers adds.

But, as in Miami, investors must also consider climate and insurance costs.

“Tampa-St. Pete’s steady demand and affordable entry points make it a solid investment, provided investors remain mindful of the region’s climate risks.

Median home list price: $542,447
Average monthly rent: $1,578

After three years in the top spot, Nashville fell to fifth place on the 2025 list. However, it remains one of the fastest growing markets in the country.

According to US Census Bureau data, the country music hotspot grew by 86 people per day throughout 2023.

That growth has led to an increase in housing prices, but the cost of doing business in the area remains slightly lower than the national average, and the corporate tax rate — while higher than Florida or Texas — remains lower than many other major markets, according to the report.