During the Pandemic Housing Boom, surging demand fueled by low mortgage rates and remote work flexibility caused active inventory levels to drop sharply nationwide. Builders couldn’t keep up, and active inventory for sale was drained by red-hot demand, leaving markets with historically low supply.
Analysts at LendingOne believe that a key indicator to watch throughout 2025 is regional active inventory levels relative to pre-pandemic levels in 2019. Markets where active inventory is furthest below pre-pandemic levels are likely to remain strong, with sellers retaining the upper hand. Conversely, in markets where active inventory significantly exceeds pre-pandemic levels, housing markets are expected to be softer, with weaker pricing momentum—offering investors and buyers increased leverage.
To identify the nation’s 10 strongest and 10 weakest housing markets of 2025, LendingOne compared current active inventory levels to those of the same month in 2019. The analysis also incorporated year-over-year inventory growth, year-over-year home price shifts, and the three-year change in median days on market. In total, we examined the nation’s 250 largest metro area housing markets.
LendingOne’s Topline Findings:
- A number of small and mid-sized metros in the Northeast and Midwest lead the list of the strongest housing markets in 2025. These markets are driven by persistently low active inventory levels and greater affordability compared to many other regions in the country.
- In contrast, several Southern markets, including many in Florida and Texas, rank among the weakest and softest housing markets currently, offering homebuyers and investors some leverage. These markets have seen a significant inventory increase and cooling demand.
The 10 Strongest U.S. Housing Markets in 2025
These are the 10 strongest markets to start 2025:
- Erie, PA
- Rockford, IL
- Bloomington, IL
- Manchester, NH
- Hartford, CT
- Binghamton, NY
- Rochester, NY
- Norwich, CT
- Albany, NY
- Atlantic City, NJ
According to LendingOne's analysis, the strongest housing markets in 2025 are characterized by a combination of rising home prices, limited active inventory, and fast property turnover. These qualities signal potential for price appreciation, rental income growth, and sustained market expansion in the coming year.
Northeastern and Midwestern metros dominate this list. Compared to high-cost coastal or Sunbelt markets, homes in these regions remain more affordable, attracting first-time buyers, downsizers, and remote workers seeking budget-friendly housing.
Several cities at the top of LendingOne’s ranking fit this description, including Rockford, Illinois, less than 100 miles from Chicago, as well as Hartford and Norwich, Connecticut, and Atlantic City, New Jersey, which serve as commuter hubs for New York City.
A lack of homebuilding in Midwest markets like Rockford, IL, and Northeast markets like Manchester, NH, further contributes to the tightness of these markets. Without significant pressure from homebuilders offering mortgage rate buydowns to boost sales in this affordability-challenged environment, existing home sellers across much of the Northeast and Midwest remain just about the only option for buyers.
The 10 Weakest U.S. Housing Markets in 2025
These are the 10 weakest markets to start 2025:
- Punta Gorda, FL
- Cape Coral, FL
- Huntsville, AL
- Lakeland, FL
- Killeen, TX
- Palm Bay, FL
- Lubbock, TX
- Colorado Springs, CO
- Naples, FL
- Ocala, FL
Florida stands out as the home state of many of the weakest markets in 2025. This is largely due to high active inventory levels, as the state is grappling with unabsorbed new supply from a construction frenzy that followed the Pandemic Housing Boom and a pullback in housing demand.
Many Florida markets heavily rely on home buyers who are moving to the region or are purchasing a second home. Sky-high condo HOA fees, rising property taxes, and soaring insurance premiums—exacerbated by a high risk of extreme weather-related damage—have priced out would-be buyers in many markets in Florida.
Not to mention, Florida’s condo market is feeling the aftereffects of regulations passed following the Surfside condo collapse in 2021.
As a result, home price growth in many Florida housing markets is significantly weaker than a few years ago. Indeed, from November 2023 to November 2024, home prices fell -7.8% and -5.9% in Punta Gorda and Cape Coral respectively, according to LendingOne’s analysis.
Big Picture
The strongest U.S. housing markets heading into 2025 are small and mid-sized metro areas in the Northeast and Midwest, where tight inventory and strong demand drive home price growth. Meanwhile, high inventory levels and cooling demand are weighing down or softening many Southern housing markets.