Home Values Are Surging in These 10 Cities as Demand Heats Up
'The Northeast and the Midwest are home to some of the hottest markets in the country,' says Selma Hepp, chief economist at Cotality.
Decatur, IL, leads the nation with annual home sales price growth of 12.4%, according to property data firm Cotality's latest home price index insights report, which analyzed median sales prices for May.
And West Virginia sees no fewer than three markets with double-digit price growth on the top 10 list.
Driving superior growth in the top markets are affordability, continued demand, and scarcity of inventory.
'The variation in home price growth is largely driven by the availability of homes for sale,' says the report. Markets that saw continued demand without corresponding rebounds in inventory saw the highest surge in prices.
'Affordable markets across the country continue to garner attention from home shoppers,' affirms Hannah Jones, senior economic research analyst at Realtor.com®.
'Increased demand has driven up competition and pushed home prices higher in these markets while other well-supplied, higher-priced markets have seen home prices level off or even fall. Home supply in the Midwest and Northeast continues to struggle to keep up with buyer demand, which has kept upward pressure on home prices.'
'What we're seeing is the flight to affordability and how growing demand in previously overlooked or stagnant markets is now pushing pricing upward,' of Corcoran, who was the first female broker to be cast on Bravo's 'Million Dollar Listing New York,' tells Realtor.com.
At the state level, Illinois had the highest annual home price growth, up 6.4% year over year. It's followed by Rhode Island, New Jersey, Wyoming, and Connecticut, which all continue to record more than triple the national rate of price growth.
Midwest markets such as Indianapolis, Kansas City, MO, and Knoxville, TN, and markets surrounding the New York metro, continue to outpace their pre-pandemic trends in May. The Midwest is due to affordability, and the New York City outer-suburbs are due to their proximity to the urban center.
Still, these hot markets don't signal an overall hotness in prices. Nationwide, year-over-year price growth dipped to 1.8% in May 2025, down from 5% price growth last May and the slowest since winter 2012.
High interest rates and home prices are pulling sales trajectories downward.
'While the national home price index continues to move up, the rate at which it's climbing has slowed considerably,' says Hepp.
These are the markets with the most price growth year over year:
Price growth: 12.4%
Median list price: $149,900
Situated around Lake Decatur and the Sangamon River, the community offers plenty of opportunities for water sports such as fishing, boating, and waterskiing. It also boasts a 1,300-acre park for hiking, biking, and running.
Price growth: 12%
Median list price: $150,000
Just 45 minutes away from Pittsburgh, this market is popular with commuters looking for a more rural vibe and more bang for their buck, as that bigger city has a much larger median price tag of $250,000.
Price growth: 11.9%
Median list price: $327,000
Just a 2.5-hour commute to Minneapolis, the small port city on Lake Superior is known for its summer destination sandbar Park Point, where billionaire Kathy Cargill made headlines last year after buying up multiple properties on the longest freshwater sandbar for well over their value, then reportedly changing her mind about her plans for the area after significant backlash.
Price growth: 10.6%
Median list price: $369,900
Just an hour from Albany and huddled on the Hudson River, Glens Falls has a historic and walkable downtown area. Don't confuse it with Glen Falls, in the Catskills.
'It makes sense that a small, post-industrial city like Glens Falls that has robust older housing stock, a quaint downtown, and proximity to amazing destinations like Lake George and Saratoga Springs is seeing price growth right now,' says Jordan.
Price growth: 10.6%
Median list price: $165,000
Just an hour away from Indianapolis, this more affordable city is home to Ball State University. According to its community page, Muncie 'has become THE HOT real estate market in Indiana.'
Price growth: 10.5%
Median home price: $170,000
Nestled along the Ohio and Little Kanawha rivers, Parkersburg has a charming downtown area with plenty of shops, live events, craft breweries, and restaurants.
Price growth: 10.4%
Median home price: $187,450
Charleston is the state's capital and is known for a vibrant arts scene, museums, and its Capitol Market, which hosts dozens of food vendors in a former freight station.
Price growth: 10.2%
Median home price: $327,000
Located on the Long Island Sound and boasting its own beach at Seaside Park, Bridgeport is on the Amtrak line and has remained relatively affordable despite being a short commute to the famously expensive New York City metro suburbs of Greenwich and Stamford.
Price growth: 10.2%
Median home price: $469,000
Located at the confluence of the Clearwater and Snake rivers, Lewiston is named for famous explorers Lewis and Clark. Its proximity to the water offers plenty of opportunity for water sports and its dry, temperate climate makes it popular with outdoor enthusiasts.
Price growth: 10.1%
Median home price: $360,000
The other Lewiston on the list is the second most populous city in Maine, and is north of the most populous city, Portland, in the Maine Lakes and Mountains region.
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