The housing market is poised for intense competition in 2026, particularly in the Northeast, where several cities are expected to dominate demand. According to a recent analysis by Zillow, the region is set to feature prominently in the list of the hottest housing markets, with urban centers leading in both price growth and buyer interest.
Zillow’s Chief Economist, Mischa Fisher, stated that factors such as constrained supply are driving this heightened competition. “Markets are hotter where supply is more constrained,” he explained, emphasizing the challenges of building in these high-demand areas. Despite a trend of homebuyers moving to more affordable regions like the Sun Belt, they have not made the list of the hottest markets for this year.
In the report, Zillow identified key metrics to define a “hot” market. These include the frequency of homes selling above the asking price and the need for price reductions. Notably, San Jose, California, which boasts a Zillow Home Value Index of $1,558,466, ranked high on the list due to significant competition among buyers. As of November 2025, 55.6% of home sales in San Jose occurred above the listed price, a direct result of limited inventory.
Despite the steep home prices in these cities, Fisher noted that the demand remains robust. “Whether it’s a lower home value index, like in Hartford, Connecticut, or a higher one, like in San Jose, in both cases, building is not particularly easy,” he added. This difficulty in increasing supply contributes to the competitive environment, ensuring that buyers remain engaged in the marketplace.
Zillow’s analysis covered the 50 most populous metropolitan areas in the United States, revealing a striking absence of Sun Belt cities in the top rankings. Instead, the following ten cities emerged as the most sought-after locations for 2026:
Top 10 Hottest Housing Markets for 2026
1. **Milwaukee, WI**
– Zillow Home Value Index: $369,303
– Home Value Growth Forecast: 2.1%
– 2025 Rank: 42
2. **Richmond, VA**
– Zillow Home Value Index: $383,275
– Home Value Growth Forecast: 2.1%
– 2025 Rank: 9
3. **Los Angeles, CA**
– Zillow Home Value Index: $941,869
– Home Value Growth Forecast: 1.1%
– 2025 Rank: 34
4. **Boston, MA**
– Zillow Home Value Index: $717,711
– Home Value Growth Forecast: 1.5%
– 2025 Rank: 16
5. **Philadelphia, PA**
– Zillow Home Value Index: $378,054
– Home Value Growth Forecast: 1.7%
– 2025 Rank: 5
6. **San Jose, CA**
– Zillow Home Value Index: $1,558,466
– Home Value Growth Forecast: 1.2%
– 2025 Rank: 48
7. **Providence, RI**
– Zillow Home Value Index: $503,409
– Home Value Growth Forecast: 3.0%
– 2025 Rank: 33
8. **New York, NY**
– Zillow Home Value Index: $704,284
– Home Value Growth Forecast: 1.5%
– 2025 Rank: 41
9. **Buffalo, NY**
– Zillow Home Value Index: $277,499
– Home Value Growth Forecast: 2.5%
– 2025 Rank: 11
10. **Hartford, CT**
– Zillow Home Value Index: $381,760
– Home Value Growth Forecast: 3.9%
– 2025 Rank: 4
As buyers navigate the complexities of these markets, affordability will continue to be a central concern. While the report identifies cities with the greatest potential for growth, the competition in these hotspots illustrates the ongoing challenges faced by homebuyers in securing desirable properties. Zillow’s findings highlight the stark contrast between the high-demand Northeast markets and the more affordable alternatives found elsewhere, setting the stage for a dynamic year in real estate.
