Photo by M. Fischetti for VISIT PHILADELPHIA.
Zillow has named Philadelphia one of the top five hottest housing markets for 2025, joining Buffalo, Indianapolis, Providence, and Hartford in the rankings.
Philadelphia’s position highlights its relative affordability compared to other Northeastern cities like New York, Washington D.C., and Boston, making it an attractive destination for homebuyers seeking alternatives to more expensive urban areas while still having the ease of travel in the busy northeast corridor of the country.
Zillow’s ranking is based on a combination of factors, including forecasted home value growth, housing market activity, labor market trends, and home construction rates. While home prices in Philadelphia are expected to appreciate, the pace is moderating, aligning with the nationwide trend of slower yet steady growth.
Buffalo thunders back as @zillow's hottest market for 2025‼️🏆🏆
(editor's note. Want to know a secret about Buffalo? It's cold there until May. Seriously. I was there for a playoff series between the Flyers and Sabres one year and had to shovel out the rental car in late April. Not sure that would make it a hot housing market for me, but... that's just one editor's opinion. Okay, back to Michelle's story...)
We are no longer a secret! 🦬 https://t.co/ttQ2mHqHb6 pic.twitter.com/0OJ8LXcNdz
Philadelphia’s inclusion in the top five reflects a continued demand for housing despite inventory challenges that persist due to the lingering effects of the pandemic-era housing deficit. As affordability remains a key driver, the city is well-positioned to attract new residents and maintain competitive momentum in the housing market.
According to a report by online real estate brokerage Redfin, 2024 was the second-least affordable year to buy a home nationally in the last dozen years, and only slightly better than 2023. A household making the typical U.S. income - which Redfin identified as roughly $83,800 - would have had to spend about 42% of that income on monthly housing costs to afford the typical home for sale. The typical home sale in the U.S. in 2024 was nearly $430,000.
Philadelphia and it's suburban counties in Pennsylvania, were better than average, at 33% of the typical income for housing. Housing is deemed affordable if it is at 30% of the typical household income, or lower.
Nationwide, Zillow anticipates relatively stable home value growth and sales in 2025, tempered by ongoing challenges like mortgage rate fluctuations and limited inventory. However, cities like Philadelphia are expected to remain strong performers, balancing demand and affordability in a competitive housing landscape.
This recognition underscores Philadelphia’s appeal as a dynamic and accessible housing market in the coming year.
