5 Reasons Buffalo Is 2025’s Hottest Housing Market
Written by
David Nadelle
Edited by
Amber Barkley
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Over the past few years, the U.S. housing market has been characterized by elevated asking prices, high interest rates and low inventory. Although more homes are being built and inflation has cooled significantly, this year will be a challenging one.
To the average American, Buffalo, New York, is known primarily for its wings and the Bills. But the City of Good Neighbors is having a renaissance, attracting visitors and permanent residents with its art, architecture, history, culture, dining and entertainment.
Zillow has predicted that Buffalo, New York, will be the hottest housing market in the U.S. in 2025. This is the second year in a row that the real-estate marketplace company has celebrated Buffalo.
Rounding out the top five hottest markets for 2025, according to Zillow, are Indianapolis; Providence, Rhode Island; Hartford, Connecticut; and Philadelphia. However, it’s Buffalo that Zillow singled out to be the most exciting housing market of 2025, and here’s why.
Next, find out which New York housing markets have plummeted in value over the past decade.
Home Values on the Rise
The U.S. is still recovering from a COVID-19 pandemic-era inventory deficit and high interest rates, so expect house prices and sales to continue to rise in 2025. Zillow reported that Indianapolis will have the biggest annual home value appreciation in 2025.
However, house prices are expected to level out this year, and Zillow predicts Buffalo’s average home appreciation to drop to 2.8% this year, down from a very high 5.8% in 2024.
Job Market Growth
Increased opportunities in the healthcare, education and technology industries has lured more residents to Buffalo. According to Zillow, the city has the highest ratio of new jobs to new housing permits, which drives demand and keeps the market competitive — so much so that new construction is having a hard time catching up.
“Construction that keeps pace with an area’s growth remains a crucial piece of keeping homes available and accessible,” said Zillow’s chief economist, Skylar Olsen. “In Buffalo, competition among buyers will remain hot, with employment growing far faster than builders are adding homes.”
Affordability Is a Major Draw
U.S. homes sold for a median price of $427,232 in December 2024, up 6.2% over the previous year, according to Redfin. Although up about 5% more year-over-year in December — 11.1% — the median sale price for a house in Buffalo was a respectable $200,000. The cost of living in Buffalo is also significantly lower than the national average, per BestPlaces.
The 2024 edition of the Demographia International Housing Affordability study ranked Buffalo the sixth most affordable housing market in the world, and Clever found that among the 50 largest U.S. metros, the most affordable rent on a minimum-wage income was found in Buffalo.
Changing Demographics
According to the National Association of Realtors, millennials are now the largest homebuying age group in America, as more younger millennials are buying for the first time and older baby boomers are selling up or transitioning to other accommodations.
The share of mortgages being offered to millennials in Buffalo sits at 53.5%, per Lending Tree.
Great Location
With its improving economy and affordable cost of living, Buffalo offers a high quality of life at a reasonable price. The city boasts a revitalized waterfront district and strong sense of community, which makes it an attractive option for homebuyers.
Near the U.S. border with Canada and close to Niagara Falls, Buffalo offers affordability you won’t find in New York City or many other parts of the U.S.
Buffalo ranks No. 34 out of 150 metro areas on U.S. News & World Report’s Best Places to Live list and No. 42 on its Best Place to Retire index.
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