Looking for a more affordable home? These are the top 20 ‘emerging’ housing markets
Housing affordability is relative, but as the U.S. grapples with a historically unaffordable era, some markets are standing out for their cheaper home prices.
The Wall Street Journal/Realtor.com Emerging Housing Markets Index recently ranked the top 20 “emerging” housing markets where buyers can still generally find an affordably priced home. The index highlights housing markets with a lower cost of living, and thriving local economies “that are attractive, but not too crowded,” out of the largest 300 metropolitan areas in the U.S.
Spoiler alert: Utah — where housing prices skyrocketed during the pandemic along with other fast-growing areas in the West — didn’t make the cut. That’s likely because it was already discovered by the time the pandemic housing rush hit.
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The No. 1 emerging affordable housing market? Topeka, Kansas, with a median home listing price of $250,000 and a low unemployment rate, according to the ranking.
“These areas are relatively inexpensive,” Hannah Jones, a senior economic research analyst for Realtor.com, said in a statement. “Inflation remains high, home prices are high, mortgage rates are high, so buyers are being hit from every angle right now. … For buyers who do need to purchase a home, it’s important that they can find one where the monthly payments are going to be reasonable.”
With mortgage rates now lingering near 8% and home prices remaining high, U.S. housing affordability is historically bad. In August, the Federal Reserve Bank of Atlanta’s Home Ownership Affordability Monitor sank to a new record low, recording an index score of 67.3 with a national median home price of $377,500, a median income of $76,621, a total median monthly payment of $2,848 and an interest rate of 7.1%. The index estimated the annual total payment share of median income to be 44.6%, well over the recommended 30% of income for housing costs.
So while a median price of $250,000 in Topeka may still seem like a far cry from affordable for some, that’s still well below the national median home price. In Utah, the statewide median priced home was $494,250 in the second quarter of 2023, according to estimates by housing experts at the University of Utah’s Kem C. Gardner Policy Institute.
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Home prices still too high for many, but here are the top 5 most affordable ZIP codes near Salt Lake
In Salt Lake County, the median price for a single-family home was $600,000 in August, according to the Salt Lake Board of Realtors. Though Utah’s home prices have fluctuated this year amid a summer seasonal pickup but still slow with sales due to high interest rates, the state’s home prices surged by 72% over the past five years, according to data from the Federal Housing Finance Agency.
Nationally, home prices were 40% higher and the typical mortgage up 114% in September compared to four years ago, according to Realtor.com. That has led buyers to look for cheaper areas.
“Nearly all of the top 20 emerging housing markets this fall either boast low home prices or are cheaper alternatives to pricier nearby cities,” Realtor.com reported.
More than half of the markets are located in the Midwest, with three of the top five in Indiana.
“Prices in these markets, however, are rising quickly. They shot up an average of 19% year over year in September compared with 9.5% nationally,” Realtor.com reported. “Since the COVID-19 pandemic, prices shot up 69% compared with 47% nationally.”
The index ranked metros with strong housing demand based on page views of local listings, the number of homes for sale, property taxes and the median number of days homes have been on the market before selling. It also weighed metros with strong economies, well-paying jobs, good quality of life, small businesses and reasonable commutes to work.
Not every market on the list is affordable. One outlier was the Santa Maria metro area, located about three hours north of Los Angeles with a median price of over $1.8 million. It’s an up-and-coming wealthy area that draws interest from international buyers, Realtor.com. noted.
Here’s the ranking:
Topeka, Kansas — $250,000 median home list price.
Elkhart, Indiana — $280,000.
Oshkosh, Wisconsin — $317,000.
Fort Wayne, Indiana — $312,000.
Lafayette, Indiana — $293,000.
Racine, Wisconsin — $352,000.
Manchester, New Hampshire — $535,000.
Concord, New Hampshire — $550,000.
Columbus, Ohio — $380,000.
Johnson City, Tennessee — $425,000.
Kingsport, Tennessee — $325,000.
Jefferson City, Missouri — $318,000.
Springfield, Ohio — $200,000.
Santa Maria, California — $1,895,000.
Dayton, Ohio — $240,000.
Janesville, Wisconsin — $320,000.
Canton, Ohio — $235,000.
Knoxville, Tennessee — $475,000.
Hartford, Connecticut — $400,000.
Worcester, Massachusetts — $490,000.
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