Written by David Dodge 

The U.S. housing market in 2025 remains a complex and challenging landscape for both homebuyers and sellers. With mortgage rates roughly double their pre-pandemic levels and home prices having skyrocketed 60% since 2019, affordability is at a historic low. The median home price of $412,500 in 2024, five times the median household income, has created what experts call a “shocking” affordability crisis. Existing home sales hit a 30-year low last year, and nearly one-third of housing markets nationwide are seeing declining prices. Despite these headwinds, certain states stand out as beacons of stability, offering a delicate balance of affordability, inventory, and long-term value. This article explores the top five U.S. states with the most resilient housing markets in 2025, based on key metrics such as price appreciation, inventory levels, property tax rates, foreclosure activity, and housing starts. These states provide opportunities for buyers seeking value and sellers aiming for strong returns in a turbulent market.

1. South Dakota: A Steady Haven for Affordability

Photo of the five-bedroom, seven-bathroom mansion at 976 Wynstone Drive in Jefferson, spanning 8,743 square feet on a 3.55-acre Missouri River waterfront lot. Courtesy of RASE. 

South Dakota, often overlooked in national housing discussions, emerges as a rock of stability in 2025. Known for its low-key charm and iconic Mount Rushmore, the state offers a housing market that balances accessibility with reliability. With a median home price of $333,000, South Dakota ranks No. 14 for affordability, making it one of the more accessible markets for first-time buyers and families. The state maintains a 3-month inventory supply, providing enough options to keep the market competitive without overwhelming demand. Foreclosure activity remains minimal, a testament to the state’s economic stability and prudent lending practices. Sellers benefit from a respectable 54% return on investment, despite a modest 2.86% year-over-year price appreciation. However, the state’s 0.99% effective property tax rate is on the higher side, which could slightly offset the affordability advantage for some residents.

• Economy Rank: No. 36 (Grade: C–)
• Price Appreciation (Q4 2023-Q4 2024): 2.86%
• Inventory: 3 months
• Affordability Rank: No. 14
• Median Sale Price: $333,000
• Key Advantage: Low foreclosure activity and strong affordability make it ideal for budget-conscious buyers.
• Consideration: Higher property taxes may require careful budgeting for long-term homeowners.

2. Idaho: A Construction Boom Fueled by Migration

A model home built by Rob Hart in Sandpoint in 2018. According to Hart, this home will resemble those planned for Culver’s Crossing. (Courtesy of Rob Hart)

Idaho’s housing market is riding a wave of popularity, driven by an influx of working-age adults seeking its natural beauty and economic opportunities. The Gem State leads the nation in housing starts, a response to growing demand that has helped increase the number of homes for sale by nearly 8% year-over-year. However, inventory remains tight at 3 months, reflecting the challenge of keeping up with rapid population growth. The median home price of $495,400 places Idaho at No. 31 for affordability, indicating that prices are a hurdle for some buyers. On the bright side, a low 0.41% property tax rate and robust 6.52% price appreciation make it an attractive market for investors and sellers looking for long-term gains. Idaho’s housing market is a dynamic blend of opportunity and challenge, ideal for those willing to navigate a competitive landscape.

• Economy Rank: No. 7 (Grade: B)
• Price Appreciation: 6.52%
• Inventory: 3 months
• Affordability Rank: No. 31
• Median Sale Price: $495,400
• Key Advantage: Leading housing starts and strong price growth appeal to investors.
• Consideration: Tight inventory and high prices may challenge first-time buyers.

3. Arizona: Growth and Stability in the Desert

A stock photo of a cul-de-sac in Phoenix, Arizona. Home prices in the city dipped in June and July but remain above 2021 levels. 

Arizona’s housing market is a powerhouse, fueled by rapid population growth and a construction boom that ranks it fourth nationally in housing starts. This influx of new homes helps maintain a 4-month inventory supply, offering buyers a decent selection despite high demand. The median home price of $451,600 and a low affordability rank of No. 48 highlight the challenges for entry-level buyers, particularly with a modest 1.22% price appreciation rate that limits seller profits. However, Arizona’s 0.41% property tax rate is among the lowest in the nation, providing financial relief for homeowners. The state’s ability to balance growth with inventory makes it a stable choice for those seeking long-term value in a vibrant market.

• Economy Rank: No. 13 (Grade: B–)
• Price Appreciation: 1.22%
• Inventory: 4 months
• Affordability Rank: No. 48
• Median Sale Price: $451,600
• Key Advantage: Strong construction activity and low taxes support long-term stability.
• Consideration: Low price appreciation may disappoint sellers seeking quick returns.

4. Tennessee: A Seller’s Paradise with Broad Appeal

Tennessee’s housing market has risen nearly 3% in recent months, with the average home valued at $320,181 as of Q3 2024, according to Zillow. (Photo: AP)

Tennessee’s housing market is a standout for its profitability and accessibility. Sellers in the Volunteer State achieved an impressive 87% gain on previous sale prices last year, making it one of the most lucrative markets for homeowners. With a median home price of $402,900 and a strong affordability rank of No. 13, Tennessee appeals to a wide range of buyers, from first-timers to investors. The state’s 0.46% property tax rate is among the lowest, further enhancing its attractiveness. A 4-month inventory supply and 4.75% price appreciation create a balanced market that caters to both buyers and sellers. Tennessee’s blend of affordability, low taxes, and strong returns makes it a top destination in 2025.

• Economy Rank: No. 21 (Grade: C)
• Price Appreciation: 4.75%
• Inventory: 4 months
• Affordability Rank: No. 13
• Median Sale Price: $402,800
• Key Advantage: High seller profits and low taxes make it ideal for investors and homeowners.
• Consideration: Moderate price growth may slow future returns compared to other states.

5. Vermont: A Buyer’s Market with Strong Seller Gains

Newly built homes at the Hillside at O’Brien Farm development in South Burlington, photographed on June 22, 2020.

Vermont’s housing market shines as a top performer, offering a robust supply of homes and impressive seller returns. The Green Mountain State saw a 19% increase in homes for sale year-over-year, though inventory has tightened to 4 months as the homebuying season peaks. Sellers benefit from a high 8.09% price appreciation rate, one of the best in the nation, making it a lucrative market for homeowners. The median home price of $443,600 and a No. 4 affordability rank suggest relative accessibility, but the 1.2% property tax rate is a notable drawback. Vermont’s market is ideal for buyers seeking choice and sellers aiming for strong returns, though high taxes require careful financial planning.

• Economy Rank: No. 35 (Grade: C–)
• Price Appreciation: 8.09%
• Inventory: 4 months
• Affordability Rank: No. 4
• Median Sale Price: $443,600
• Key Advantage: Ample inventory and high appreciation benefit both buyers and sellers.
• Consideration: High property taxes may strain budgets for long-term residents.
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Conclusion: Navigating Opportunities in a Challenging Market

The U.S. housing market in 2025 is marked by high prices, elevated mortgage rates, and widespread affordability challenges, but South Dakota, Idaho, Arizona, Tennessee, and Vermont offer pockets of resilience for savvy buyers and sellers. South Dakota and Tennessee stand out for their affordability and low property taxes, making them accessible for first-time buyers and profitable for sellers. Idaho and Arizona, driven by population growth and construction booms, provide opportunities for long-term investment, though affordability remains a hurdle. Vermont’s robust inventory and high price appreciation appeal to both buyers and sellers, tempered by high taxes. Each state presents a unique mix of strengths and challenges, requiring careful consideration of factors like taxes, inventory, and price trends. For those navigating these markets, working with a knowledgeable local real estate agent can be invaluable, helping buyers find value and sellers maximize returns. As the housing market continues to evolve, these five states remain bright spots for stability and opportunity in 2025.