In this article, we will be covering the 27 cheapest housing markets in the US. If you wish to skip our detailed analysis, you can move directly to the 5 Cheapest Housing Markets in the US.
The US Housing Market at a Glance
Homeowners in the US continue to be victims of the mortgage lock-in effect where high rates stop them from selling their houses thereby reducing supply. Amidst the spring homebuying season in which the housing supply still remains restricted, an opportunity has been witnessed. As reported by CNBC on April 26, would-be homebuyers are seeing an opportunity in new construction. This is because these new homes tend to offer more incentives and are not limited as compared to existing homes.
Buyers are also getting motivated to consider the new home sales market through incentives including rate buy-downs and price cuts. The month of March saw the sale of 693,000 new single-family houses thereby recording a year-over-year rise of 8.3%. At the same time, existing home sales went down by 3.7% year-over-year. In terms of price, the median price for a new home has been nearly 4% higher than that for an existing home. Although buyers who were price conscious used to take into account only the existing homes market, the market of new homes tends to offer them more options. You can also take a look at some of the best states for first-time homebuyers.
Regional Analysis of the Homebuying Market
According to a report by Zillow, home values have climbed in 47 of the 50 largest US metro areas. The highest annual price increases have been recorded at 12.7% for Hartford, 11.8% for San Diego, 11.2% for San Jose, 9.5% for Boston, and 9.3% for Los Angeles. Some of the least affordable metros for homebuyers in the US have been previously discussed. On the contrary, home values have dropped in New Orleans by 7.6%, in Austin by 4.1%, and in San Antonio by 1.9%. New construction in the South such as in Florida and Texas has been capable of catering to the buyer demand which has helped control the rapid price appreciation. Regarding this, you can view the most underpriced housing markets in the US in 2024.
In terms of housing supply, total inventory has grown annually in 36 of the 50 largest US markets. In this regard, the highest increases have been recorded for Tampa at 38%, Dallas at 37.8%, and Orlando at 33.2%. New listings have climbed in San Jose by 18.4%, in Dallas-Fort Worth by 16.6%, and in Tampa by 15.4%. Simultaneously, new listings have declined in Boston by 17.2%, in Pittsburgh by 14.2%, and in Washington D.C. by 13.6%.
Overview of the Rental Market
As compared to 2023, rents were reported to have increased by 3.6%. On a year-over-year basis, rents have increased in Providence by 8.2%, in Louisville by 6.9%, in Cleveland by 6.5%, in Hartford by 6.4%, and in Boston by 6.1%. As of March, asking rents have risen by 0.6% month-over-month. Pittsburgh is the only major US metro where rents have declined by 0.2% since February. The month of March recorded a 0.7% month-over-month rise in the typical rent for single-family homes. On the other hand, a modest growth rate of 0.5% was witnessed for multi-family rents.
New Communities in the US
American homebuyers can consider looking at offerings from reputable homebuilders such as LGI Homes, Inc. (NASDAQ:LGIH), Dream Finders Homes, Inc. (NASDAQ:DFH), and KB Home (NYSE:KBH). Let’s discuss new developments by these firms.
LGI Homes, Inc. (NASDAQ:LGIH) is a leading American home construction company that operates across 36 markets in 21 states. The company has closed more than 65,000 homes up till now. On April 16, LGI Homes, Inc. (NASDAQ:LGIH) announced the opening of its first community named ‘Parkside’ in the St. Cloud, Minnesota market. Residents will be living at a distance of only 15 minutes from downtown St. Cloud while Minneapolis can also be conveniently accessed. The nearby Goenner Park can also be visited to enjoy outdoor recreation. New homes at Parkside have prices starting from the $370,000s.
Dream Finders Homes, Inc. (NASDAQ:DFH) engages in the construction of single-family homes in Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, and the Washington, D.C. metropolitan area. On March 21, Dream Finders Homes (NYSE:DFH) reported the development of its new home community ‘Bungalow Walk at Waterside’ in Lakewood Ranch, Florida. Downtown Sarasota and Siesta Key are situated close by. Commercial, retail, and office space as well as diverse dining venues and an eight-acre park with nature trails can also be accessed while staying in the community.
KB Home (NYSE:KBH) is one of the largest home builders in the United States. The firm builds quality homes that are customized as per the buyer’s preference and available budget. On April 16, KB Home (NYSE:KBH) announced the grand opening of a new home community in Justin, Texas. Community amenities include a clubhouse, pool, playground, parks, sports fields, and hiking trails. Families can also avail the top-rated Northwest Independent School District schools while being able to commute to Fort Worth, Denton, Westlake, and Grapevine. For shopping and dining, residents can visit the historic downtown Justin and Denton Town Square. Pricing for the homes starts from $370,000.
With this context, let’s move to the 27 cheapest housing markets in the US.
27 Cheapest Housing Markets in the US
Our Methodology:
In order to compile a list of the 27 cheapest housing markets in the US, we sourced data from Zillow. We have used the average home value by state as our metric. To represent cheap housing, we have included the states where the average home value is lower than the current US average. Please note that the average United States home value is currently $354,179, according to Zillow.
The states have been ranked in descending order of their average home values, as of March 2024.
27 Cheapest Housing Markets in the US
27. Wyoming
Average Home Value: $340,933
As of March, the typical Wyoming home value is $340,933. The 1-year rise in this value has been recorded at 3.5%. Therefore, Wyoming is a cheap US housing market.
26. Minnesota
Average Home Value: $331,117
The average Minnesota home value is currently $331,117. Thus, homebuyers can resort to the state for affordable housing.
25. North Carolina
Average Home Value: $329,225
North Carolina is another state which is a cheap market for housing. The state has an average home value of $329,225.
24. Georgia
Average Home Value: $327,174
The average home value in Georgia falls behind the national average. This ranks the state among the cheapest housing markets in the United States.
23. Tennessee
Average Home Value: $317,482
Those looking for cheaper home prices can settle in the state of Tennessee. The state’s typical home value is $317,482, as of March.
22. Texas
Average Home Value: $304,027
Texas offers an average home value of $304,027. This value is lower than the US average home value of $354,179.
21. New Mexico
Average Home Value: $300,227
As of March, the average New Mexico home value is $300,227 which has increased by 5.4% year-over-year. The state ranks 21st on our list of the cheapest housing markets in the US.
20. South Dakota
Average Home Value: $299,062
South Dakota is another housing market that is not expensive. As of March, the state boasts an average home value of $299,062.
19. Wisconsin
Average Home Value: $294,909
The typical home value in Wisconsin has increased by 5.5% between 2023 and 2024. This value was recorded at $294,909 in March and is relatively affordable.
18. South Carolina
Average Home Value: $293,893
Homebuyers can avail an average home value of $293,893 in the state of South Carolina. This home value has climbed 4.0% since 2023.
17. Pennsylvania
Average Home Value: $261,312
Pennsylvania is among the cheapest housing markets in America. As of March, the average home value in the state is $261,312.
16. Illinois
Average Home Value: $257,738
The typical home value in Illinois has gone up from $240,835 in March 2023 to $257,738 in March 2024. However, the market is still affordable as compared to many other US states.
15. Nebraska
Average Home Value: $257,167
The average home value in Nebraska is $257,167. Therefore, the state of Nebraska ranks 15th on our list of the cheapest US housing markets.
14. North Dakota
Average Home Value: $253,395
American homebuyers who are seeking inexpensive housing can resort to North Dakota. The average home value in the state is currently $253,395.
13. Missouri
Average Home Value: $243,216
The typical home value in the state of Missouri is lower than the average US home value. This typical value was recorded at $243,216 in March.
12. Michigan
Average Home Value: $239,770
Michigan ranks among the 27 cheapest housing markets in the United States. As reported by Zillow, the state has a home value of $239,770.
11. Indiana
Average Home Value: $236,990
As recorded in March, Indiana has a cheap home value to offer. The average home value in the state is $236,990.
10. Alabama
Average Home Value: $226,045
Although the average home value in Alabama has increased between 2023 and 2024, it is still as low as $226,045. Hence, the state’s housing market is cheap.
9. Kansas
Average Home Value: $223,883
Kansas is another state where home values tend to be low. The state’s typical home value was reported to be $223,883 in March.
8. Ohio
Average Home Value: $223,135
The state of Ohio offers affordable housing prices. As of March, the typical home value in the state is only $223,135.
7. Iowa
Average Home Value: $214,151
With an average home value of $214,151, Iowa ranks 7th on our list of most affordable US housing markets.
6. Oklahoma
Average Home Value: $203,455
According to Zillow, the typical home value in Oklahoma is $203,455. This deems the state as one of the cheapest housing markets in the country.
Click to continue reading and see 5 Cheapest Housing Markets in the US.
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Disclosure: None. 27 Cheapest Housing Markets in the US is originally published on Insider Monkey.