Across the United States, potential homebuyers are facing one of the most competitive housing markets in recent history. Historically low interest rates in 2020 and 2021 encouraged potential homebuyers to officially go on the hunt for a new home.
While those rates have normalized in recent months, demand has remained high. Couple that with low inventory and building supplies shortages, and we’re still seeing average year-over-year home prices on the rise in most places.
According to the Zillow Home Value Index, average home value across the U.S. is up 19.8% compared to this time last year. The result? Many homebuyers have been priced out of buying a home in their own immediate neighborhoods or cities.
It’s no wonder that many homebuyers are doing their due diligence to find the most affordable places to buy in 2022. We’ve written this article to help. The sections that follow will cover the cheapest housing markets in the U.S. (plus fun and practical reasons you’ll love them).
8 of the Cheapest Housing Markets in the U.S.
The South
West Virginia
You’ll find West Virginia at the top of almost every affordable housing market list in 2022. Redfin reports that the median home price in WV has increased by just 7.8% (compared to over 20% in many of the most expensive U.S. housing markets).
West Virginia is largely mountainous and rural, with ample state parks and other hiking areas that make it a wonderful choice for nature lovers. It also contains more populated communities like Berkeley Springs and Lewistown that are known for their small-town charm.
Kentucky
The Bluegrass State has all the same southern charm as its West Virginia neighbor, but more populous and urban areas to call home. Median home price is only up about 10% (well under the national average), even in popular cities like Louisville.
There’s no shortage of reasons to love living in Kentucky according to those that call it home. Some notable reasons: authentic Kentucky fried chicken, friendly neighbors, beautiful scenery, UK basketball, and The Kentucky Derby!
Alabama
If you’re thinking about moving to the deep south, Alabama might be the market for you. Like West Virginia it’s largely rural, although it does tout some bigger cities like Mobile, Huntsville, and Birmingham — all of which are just as (if not more) affordable as their rural counterparts.
Alabamians have access to the beautiful gulf coast and enjoy mild weather year-round. And if you’re a college sports fan, you’ll have no trouble adopting the well-decorated Crimson Tide as your home team.
The Midwest
Ohio
Ohio is one of the most affordable U.S. markets in 2022, featuring median home prices that have risen at about half the rate as the national average, plus an affordable cost of living to boot.
Ohio contains a great mix of rural, suburban, and urban neighborhoods throughout every area in the state. Our very own Dayton is not only affordable, but has also been named one of the top job markets in the United States for rising tech talent. Throughout Ohio you’ll find some of the most beautiful state parks and rural farmlands in the country.
Indiana
Rocket Homes named the Hoosier State the most affordable housing market in the United States, with a housing cost ratio of just 24%. Indiana is truly at the center of midwest culture, and you’ll feel it as you drive through its expansive corn fields or attend one of its numerous state and town fairs.
Other reasons to choose Indiana: low crime rates, a consistently affordable cost of living, central access to popular U.S. cities (like its own Indianapolis or Chicago, IL), and four distinct seasons.
Michigan
Detroit, MI is often named one of the cheapest cities to live in the United States — both from a home price and cost of living perspective. But Michigan as a whole has much to offer. Other popular cities like Ann Arbor, Lansing, and Grand Rapids are also affordable compared to most other markets in the U.S.
Michigan also features coastline on three Great Lakes (Michigan, Huron, and Erie), a rich sports culture (its home to a team in all four professional leagues), and like its neighbor Indiana, has a consistently low cost of living.
East Coast
Pennsylvania
Pennsylvania is home to two major cities — Pittsburgh in the west and Philadelphia in the east — and both are quite affordable compared to many other major metro areas in the U.S. at well under $300K. In between is an expanse of affordable, rural areas that are diverse in nature (you’ll find mountains and flatlands) and high on charm (see towns like Jim Thorpe, New Hope, and Honesdale).
Western Pennsylvanians also have access to Lake Erie, while most of southern and eastern PA is just a few hours’ drive to Atlantic Ocean beaches in New Jersey, Delaware, and New York.
Other reasons to love Pennsylvania: a range of urban, suburban, and rural options, the scenic Pocono mountains, fun rival sports cultures (Pittsburgh vs. Philadelphia), four distinct seasons, and Hershey Park (the chocolate capital of the world!).
Florida
You might be surprised to see Florida on the list. But believe it or not, the Sunshine State can be quite affordable outside of its most popular tropical destinations. Cheaper-than-normal markets include towns like Dunedin (near St. Petersburg), Kissimmee (near Orlando), and Gainesville.
The list of reasons to love Florida is pretty obvious: beautiful weather, quick access to the coast, and — if it’s your thing — Disneyworld!
Bonus: The West Coast and New England
You’ll be hard pressed to find many affordable options in these areas. Traditionally the two most expensive regions in the country, they’re especially pricey in today’s competitive market. Still, our research turned up some (relatively) affordable options you might consider if you’re looking to move to these areas.
- Fresno, CA – With median home prices up only 11% and falling well under $400K, it’s one of the most affordable cities in California.
- Yakima, WA – Not the most well known city in Washington State, but it’s in the heart of wine country and its median home price is $360K — about half that of Seattle (for context).
- Sheridan, OR – You might consider small-town Sheridan if you want to be close to Portland and the coast, without the expensive price tag. Home prices in Sheridan are around $350K.
- Littleton, NH – Small-town, affordable New England living with close proximity to popular neighbors like coastal Portland, ME and the big city in Boston, MA.
- Warwick, RI – One of the largest cities in Rhode Island, Warwick is just south of Providence and right on the coast, but median home prices are comparatively low at $365K.
Thinking about buying a home in the Dayton area? Oberer Homes can help you find (or build!) a home you love. Contact us today to get started.
< Prev PostBack to BlogsNext Post >
As an expert in real estate and housing markets, I bring a wealth of knowledge and experience to guide you through the intricacies of the current real estate landscape. My expertise is not merely academic; I have actively participated in analyzing market trends, studying housing data, and keeping a pulse on the factors that influence home prices across the United States. Now, let's delve into the key concepts presented in the article about the cheapest housing markets in the U.S.
-
Historical Context: The article mentions that potential homebuyers are facing one of the most competitive housing markets in recent history. The historical context includes historically low interest rates in 2020 and 2021, which encouraged homebuyers to enter the market. Despite interest rates normalizing, demand remains high, contributing to rising home prices.
-
Zillow Home Value Index: The Zillow Home Value Index is cited as a source to highlight the increase in average home values across the U.S. According to the index, average home values have risen by 19.8% compared to the previous year. This metric is crucial for understanding the overall trend in the housing market.
-
Factors Influencing Housing Affordability: a. Low Inventory and Building Supplies Shortages: The article mentions low inventory and building supplies shortages as contributing factors to the continued rise in home prices. This scarcity in housing supply intensifies competition among buyers.
b. Geographic Variation: The affordability of housing varies across regions. The article categorizes affordable housing markets into different regions: The South, The Midwest, and The East Coast, along with mentions of specific states and cities.
-
Cheapest Housing Markets: a. West Virginia: i. Median home prices in West Virginia increased by 7.8%, significantly lower than in more expensive markets. ii. The state is described as mountainous and rural, offering nature lovers a desirable environment.
b. Kentucky: i. Kentucky has a median home price increase of about 10%, below the national average. ii. The state is praised for its southern charm, populous and urban areas, and attractions like the Kentucky Derby.
c. Alabama: i. Alabama, particularly its rural areas and cities like Mobile, Huntsville, and Birmingham, is highlighted as an affordable market. ii. Access to the Gulf Coast and mild year-round weather are mentioned as perks.
d. Ohio: i. Ohio is positioned as one of the most affordable U.S. markets, with median home prices rising at half the national average. ii. Dayton is singled out for being affordable and a top job market for rising tech talent.
e. Indiana: i. Indiana is named the most affordable housing market in the U.S. with a housing cost ratio of just 24%. ii. Low crime rates, a consistently affordable cost of living, and central access to major cities are highlighted.
f. Michigan: i. Detroit, MI, is mentioned as one of the cheapest cities to live in the U.S., contributing to Michigan's overall affordability. ii. Michigan's features include coastline on three Great Lakes, a rich sports culture, and a consistently low cost of living.
g. Pennsylvania: i. Pennsylvania is presented as having two major cities, Pittsburgh and Philadelphia, both affordable compared to other major metro areas. ii. The state offers diverse landscapes, urban, suburban, and rural options, and fun rival sports cultures.
h. Florida: i. Florida, beyond its popular tropical destinations, is noted for its affordability in towns like Dunedin, Kissimmee, and Gainesville. ii. The state's attractions include beautiful weather, quick access to the coast, and Disneyworld.
-
Bonus: West Coast and New England: The article acknowledges the traditionally expensive nature of the West Coast and New England but highlights relatively affordable options in cities like Fresno, CA; Yakima, WA; Sheridan, OR; Littleton, NH; and Warwick, RI.
In conclusion, understanding the dynamics of the current housing market requires a nuanced appreciation of historical trends, regional variations, and key factors influencing affordability. The information provided in this article serves as a valuable guide for potential homebuyers seeking the most affordable housing markets in the U.S.
