Zillow taps Indy as one of 2025's hottest housing markets
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The Indianapolis housing market was hot in 2024, but Zillow expects it to catch fire in 2025.
Why it matters: Zillow's annual ranking forecasts the most competitive housing markets for buyers. Markets at the top of the list are largely "starved for housing inventory," the real estate platform shares with Axios.
- These regions tend to be relatively affordable with strong job and wage growth.
The big picture: On the 2025 list, Indianapolis comes in as the hottest metro in the Midwest and No. 2 overall, an improvement from an already impressive No. 4 spot in 2024.
- Buffalo, New York, is No. 1 again.
Zoom in: Zillow says the ranking can be attributed to Indy's strong home price forecast for this year, which is expected to be greater than the appreciation it experienced in 2024.
- Among the top five hottest markets of 2025, only Indianapolis has a rising outlook for home value appreciation, increasing from 2.8% annual appreciation in 2024 to 3.4% in 2025.
- The projected typical home value in Indianapolis is $223,261, compared to the U.S. average of $357,469, per Zillow.
What they're saying: "Indianapolis is relatively affordable when compared to nearby Chicago metro," Zillow senior economist Orphe Divounguy told Axios. "Strong employment (and) income growth has helped to support housing demand. Strong housing demand combined with a lack of housing inventory keeps competition for homes elevated."
Zoom out: Hartford, Connecticut, and Richmond, Virginia, are the rising stars to watch in 2025. Sellers there have the upper hand as homes fly off the market at record speed.
- Across most of the U.S., buyers and sellers are at somewhat of a stalemate, Divounguy says.
- Meanwhile, San Francisco and Memphis, Tennessee, are slipping. They fell 19 and 30 positions, respectively. In these markets, homes are already sitting on the market longer and home values are expected to depreciate, according to Divounguy.
State of play: Divounguy said as the housing market loosened over the past year, the number of homes available for sale increased less in Indy and other hot markets because demand remained relatively strong when compared to the flow of homes put up for sale.
- "Places that fell in the ranking are markets that are expected to see relatively larger declines in demand relative to supply," Divounguy said. "Some notable examples include Orlando and Atlanta. Over the past year, for-sale inventory is up 30% and 36% in Orlando and Atlanta respectively. This is compared to just 17% across the country."
The bottom line: Affordability and inventory are the name of the game, keeping Indy near the top of the list for another year.

