Despite high home prices and elevated mortgage rates, some local housing markets are seeing rapid population growth and improving affordability---factors that make them attractive to real estate investors.
A new report titled "Emerging Trends in Real Estate 2025" from Price Waterhouse Coopers and the Urban Land Institute analyzed various factors, including the current local market and new construction prospects, to determine the best markets for investors next year.
To create the list, the firm focused on cities showing strong growth in business formation, employment opportunities, and population. Here are the five hottest housing markets for buyers and investors in 2025.
Dallas, TX
Dallas is one of the best cities for real estate investors hoping to purchase property next year. The city is marked by rapid population growth and economic opportunities. Additionally, it has business-friendly policies, partly due to the city being home to Fortune 500 companies, according to the New York Post, citing Douglas Elliman real estate agent Harrison Polsky.
The median sale price of a typical single-family home in Dallas was $412,500 in September. That is 1.6% lower year-over-year.
Meanwhile, the median monthly rent in the city is $1,394 this month, according to Apartments.com. In comparison, the national average rent price is currently $1,558.
Miami, FL
Miami has seen steady demand from investors and buyers alike, pushing rent and property values higher. This offers investors a potential yield of between 5% to 8%.
The median sale price of a home in Miami is $620,000, up 5.5% from the previous year. The median rent is $2,107 per month.
Houston, TX
Houston has thriving healthcare, tech, and green energy sectors, primarily from its development-friendly policies. Despite those, the city's housing market remains affordable, with the median sale price of homes at $351,690 and the median monthly rent at $1,191.
Tampa-St. Petersburg, FL
Tampa-St. Petersburg is great for investors hoping to earn a substantial income from renting out short-term to seasonal residents due to its warm weather and beaches.
The median home sale price in the Tampa-St. Petersburg area was $445,000 in September, a 3.3% dip from the previous year. The median rent is $1,760 a month.
Nashville, TN
Nashville is one of the fastest-growing housing markets in the US, with its population growing by 86 people a day in 2023, per data from the US Census Bureau.
The median sale price of a home in Nashville is $450,000 and the median rent is $1,662. Housing costs are slightly higher due to the population growth but the cost of doing business remains below the national average, the Post noted.
