In 2025, investing in US real estate remains a profitable tool, but the market has its risks. Find out which cities are currently the most promising for buying a home, how high mortgage rates affect profitability, what investors should pay attention to and what costs to consider before a deal

Despite the fluctuations in the American housing market in recent years, real estate investments remain one of the most stable ways to preserve and increase capital. Renting housing in the United States continues to bring passive income to investors, as the demand for housing does not disappear even against the background of high mortgage rates. At the same time, it is important to choose the right city for maximum benefit, since the dynamics of the market in different regions differ significantly.

In this material, we will talk about the state of the American real estate market in 2025 and which cities are considered the most promising for investment today.

Features of the current real estate market in the United States

The average rate on a 30-year fixed mortgage in 2025 remains at about 7%. This is significantly higher than a few years ago, and for many buyers makes housing less affordable. Because of this, the number of deals with concessions from sellers is increasing in the market - discounts, covering part of the closing costs or temporary "reduction" of the rate for buyers.

Despite the high cost of credit, the demand for rental housing remains stable. Many Americans are postponing the purchase of their own home and renting apartments or houses for a longer period. This creates favorable conditions for investors who want to earn a profit from renting out their housing.

Another feature of 2025 is the increase in supply. The exposure time of houses on the market has increased: on average, objects are sold for more than 50 days. For investors, this means more opportunities for profitable deals, especially in cities with high population growth and a stable economy.

How to choose the best city to invest in?

The principles of choosing a location for real estate investment remain universal, but in 2025 it is worth paying attention to additional factors. Key criteria:

- Rental housing occupancy rate - in cities with low vacancy rates, it is easier to find tenants.

- Rent-to-mortgage ratio - the more rent covers your monthly expenses, the better the investment.

- Labor market conditions – cities with new jobs are attracting residents and increasing demand for housing.

- Insurance and tax risks – in some states, property insurance costs have increased sharply, which should be taken into account in financial calculations.

- Rental market dynamics – in some US cities, especially in the South, new complexes are being actively introduced, which may restrain the growth of rental rates.

Top 7 US cities for real estate investment in 2025

Boise, Idaho

Boise continues to remain attractive to investors due to a strong labor market, the development of the IT sector and stable population growth. Despite the price correction in 2022–2023, in 2025 the market leveled off and housing demand increased. In the suburbs, houses can be found cheaper than in megacities, which makes the city interesting for investors focused on the middle class.

Houston, Texas

Houston remains one of the most attractive cities for long-term investment. The city’s economy is based not only on oil and gas, but also on medicine, education, and IT. In 2025, the average home price here is lower than in many large metropolises, and the population continues to grow. For investors, this means stable demand for rentals. An important bonus is the absence of income tax in Texas.

Dallas, Texas

Dallas is a dynamic city with high rates of business and infrastructure development. The number of jobs here continues to grow, and therefore the population. In 2025, the average price of housing in Dallas increased slightly, which makes it possible to purchase properties without the risk of “overpaying”. Both houses for families and apartments for young professionals are attractive to investors.

Las Vegas, Nevada

The Las Vegas real estate market has cooled after the boom of the pandemic years, but this does not diminish its potential for investment. The city is quickly recovering thanks to tourism, construction and technology companies. Investors are attracted by affordable housing prices, the absence of income tax in Nevada and a constant influx of new residents.

Atlanta, Georgia

Atlanta is the economic center of the southeastern United States. Despite some cooling of the market in 2025, the city retains investment potential. Large corporations are located here, innovative sectors are developing, and the population continues to grow thanks to migrants and young professionals. For the rental business, Atlanta is interesting due to the low cost of living and high demand for affordable housing.

Orlando, Florida

Orlando is known as the tourist center of the United States, but in recent years it has also become a business hub. The labor market here is growing rapidly, and housing prices remain more affordable than in Miami. For investors, the steady flow of visitors and migrants is an important factor, which supports the demand for rental housing. However, it is worth considering the rising cost of property insurance in Florida.

Tampa, Florida

Tampa is actively developing, especially in the IT and healthcare sectors. The city attracts both tourists and new residents due to its favorable climate, beaches and relatively affordable housing. In 2025, the demand for rental housing here is high, but investors need to factor in increased insurance prices and utility fees.

The US real estate market in 2025 offers investors both new opportunities and new risks. High mortgage rates and more expensive insurance in certain states can reduce profitability. At the same time, the increase in housing supply and increasing demand for rentals open up a chance to invest profitably in promising regions.

If you are planning to buy a home in the USA for rental or as a long-term investment, be sure to analyze the local market, calculate all costs and assess which income format suits you best - stable cash flow or future appreciation of the property value.

To avoid mistakes and take into account all the nuances of signing agreements, we recommend consulting a qualified lawyer who will help you choose the best option for investment in the USA.

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