These Blazing Markets Blend Big-City Amenities With Lower Housing Costs Than Megacities Along the West and East Coasts.
By Patrick S. Duffy
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Reviewed by Liisa Rajala
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Edited by Dawn Bradbury
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March 25, 2025, at 8:00 a.m.
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U.S. News & World Report
The Hottest U.S. Housing Markets
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Cityscape image of downtown Omaha, Nebraska with reflection of the skyline at beautiful autumn sunset.
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The “Gateway to the West” MSA offers job growth, low unemployment, a lower cost of living, and a low-risk housing development process.\n\nKey Takeaways\nThe top-ranked MSAs are located in a variety of locations including Nebraska, Texas, South Carolina and Colorado.\nMarkets to watch that improved the most between June and January include Orlando, Florida; St. Louis; Greeley, Colorado; Richmond, Virginia; and Southern California’s Inland Empire counties, which include Riverside and San Bernardino.\nThe most resilient markets that improved year-over-year through January were led by Columbia, South Carolina; Kansas City, Missouri; Los Angeles; San Jose, California; and Boise City, Idaho.\nWith inflation through February slowly heading in the right direction and 30-year fixed mortgage rates recently settling in at about 6.7%, hopeful homebuyers are slowly edging back into the housing market. But is it enough to unlock a semifrozen housing market?\n\nThe good news is that according to Freddie Mac, applications for mortgage purchase loans were up 5% year-over-year through mid-March. At the same time, with stock markets in flux and consumer sentiment dipping sharply in recent weeks, if concerns about rebounding inflation and job security continue to build, that could prompt some buyers to wait for more certainty.\n\nStill, even if consumers hold back on high-ticket items such as new cars, trips and electronics, the stability of owning one’s own home is a powerful motivator to take the plunge into the housing market – especially if it’s relatively affordable, such as in the hottest housing market for January.\n\nSince the metrics for local housing markets will not be equal for each region, state or city, it’s important for buyers and sellers to do their research,rank their must-haves and find the best agents for their situations.\n\nOur analysis of the hottest housing markets pulls from the U.S. News Housing Market Index, which incorporates a wide array of data points and provides a simple yet comprehensive way to rank the covered metropolitan statistical areas (MSAs) from frigid to balmy on a scale of 1-100. This particular ranking is based on data from January 2025.\n\nRead: 2025-2030 Five-Year Housing Market Predictions\nHottest Markets Overall\nAlthough the hottest MSA scores ranged up to 76.2, there were lower-scoring MSAs under 50, including Boston, Sacramento and two markets in Florida. At the top of the spectrum, the following MSAs are the hottest housing markets ranked from first to fifth:\n\nOmaha, Nebraska – 76.2\nAustin, Texas – 72.3\nHouston – 72.1\nCharleston, South Carolina – 71.6\nDenver – 71.5\nGiven a tightening job market with employers regaining the balance of power, working remotely full time is much less of a consideration for today’s homebuyers. As a result, the metrics that define a relatively hot housing market are returning to the traditional basics of local demand, supply and financial considerations. Whether in Nebraska or South Carolina, what these hottest markets seem to share are big-city amenities without the high housing costs of MSAs closer to the megacities along the West and East coasts.\n\n\nThe Hottest MSA Overall: Omaha, Nebraska\nThe Omaha, Nebraska, MSA offers a mix of strengths, including positive job growth thanks in large part to robust economic development activities, a lower unemployment rate versus the overall U.S., a reduced cost of living compared with many large metro areas and a practical process to encourage new housing developments at a lesser risk to homebuilders.\n\n\”We have something for anyone, including urban vibrancy, great suburban neighborhoods, historic neighborhoods with character and family dynamics and tranquil spaces as well,\” says Alec Gorynski, senior vice president of economic development for the Greater Omaha Chamber of Commerce. With the region just crossing over the one million population threshold and jobs growing at a healthy clip, Gorynski is not surprised by Omaha’s top ranking.\n\nOn the economic front, Gorynski notes that besides a low unemployment rate, Omaha’s labor participation rate of nearly 67% compares favorably with a national rate of just over 62%, which keeps the chamber quite busy given that their workforce extend far beyond the city’s borders. As he explains, the Greater Omaha economic development partnership extends across eight counties to include a much broader labor shed with various employment centers, adding, \”It’s much better to collaborate than compete with each other.\”\n\nThe larger challenge for the chamber’s economic development team, which is funded by the city of Omaha as well as private sector firms and individuals, is recruiting new employers and people to the area while also retaining those who might otherwise depart to other states.\n\n\”We’re working to grow the economy with some strong industries with a diverse employment base,\” notes Gorynski. \”This lends itself to economic resiliency, so we’re not overly dependent on one industry, which makes it smoother for us versus the rest of the country.\”\n\nHere’s a deeper look at the various data points regularly tracked by the Housing Market Interface for this MSA:\n\n\nU.S. News\n\nU.S. News\n\nThe overall Housing Market Index score of 76.2 for the Omaha MSA rose 0.7 points year-over-year through January and compares with 75.5 in January 2024. At the same time, the overall HMI for the United States fell by -0.8 points to 66.6. Notably, when compared with that of the overall U.S., the HMI in Omaha has consistently ranked higher since December 2019.\n\n\nThe three subindexes covering demand, supply and financial factors for January are also calculated on the same scale of 1-100.\n\nDemand HMI – 82.3 (80.7 in June 2024)\nSupply HMI – 51.4 (45.2 in June 2024)\nFinancial HMI – 94.9 (95.4 in June 2024)\nDuring the 12-month period ending December 2024, the Omaha MSA gained more than 12,000 nonfarm jobs, for a growth rate of about 2.4%. According to the Bureau of Labor Statistics, the highest percentage of increases in job categories include information, education and health services and leisure and hospitality. Omaha’s unemployment rate in December was just 2.8% versus 4.1% for the overall U.S.\n\n\nAs urban areas of north and south Omaha continue to redevelop with new apartments and a few smaller developments with single-family homes for sale, the overall mix of building permits in the greater Omaha MSA has meant a higher average share for multifamily units over the past year, rising by several percentage points to 41% versus 32% in 2018. Looking ahead to our building permit forecasts to the middle of 2025, look for the mix of single-family to multifamily permits to average about 56% and 44% of the total, or approximately 310 and 240 units per month, respectively.\n\n\nSince hitting a record high of $325,000 in June, the median home sales price in Omaha has fallen to $304,000. Still, home prices here rose 4.8% year-over-year versus a national rise of 4.2% to $419,000, or 38% higher than in Omaha.\n\nLast June, the Omaha MSA had under 1.2 months of supply, making for an unusually tight seller’s market. Since then, while the supply has varied month to month, ultimately rising to 2.2 months, it’s still much lower than the national average of 3.6 months. In general, if a healthy supply timeline ranges from four to six months, it’s possible that more buyers will look for new home alternatives in Omaha versus the low supply of existing homes.\n\nFortunately, the area is also home to several local builders as well as national leader D.R. Horton to provide more supply. According to the Great Plains Regional MLS for the Omaha Area Region, over the 12-month period ending in January, newly built homes made up almost 48% of unsold inventory, 19% of new listings and 16% of closed sales. Those new homes also come at a higher cost, with an average premium of nearly 44% over existing homes.\n\nOne of the reasons that the greater Omaha area is able to continue building new homes is Nebraska’s unique use of Sanitary and Improvement Districts. Created when a developer buys land to
