In this article, we will be covering the 20 affordable, promising cities to buy real estate in 2024. If you wish to skip our detailed analysis, you can move directly to the 5 Affordable, Promising Cities to Buy Real Estate in 2024.
US Real Estate Affordability: A Brief Recap
The US housing market has long been subjected to a serious housing crisis. On October 20, 2023, CNN reported that home sales hit a 13-year low in September 2023. A large proportion of would-be buyers were unable to attain a home due to soaring interest rates in addition to highly-priced houses. The monthly payment on an average-priced home required 40% of the median household income which resulted in affordability concerns.
Current Affordability Patterns and Home Price Dynamics
The New York Times has reported the aforementioned affordability crisis to persist. Home prices in the United States have climbed more than 60% in the preceding 10 years. Simultaneously, a quarter of renters in the United States tend to spend more than half of their income on housing.
On the other hand, the mortgage situation remains adverse. While mortgage rates fell through mid-January to the mid-6% range, they have started to climb again. On April 18, CNBC reported that the average rate on the 30-year fixed mortgage exceeded 7% on April 1, the highest since mid-November of 2023. Mortgage rates have been predicted to remain elevated and hence, homebuyers and owners who have been waiting for lower mortgage rates might be hanging in there for a longer period.
On April 15, Zillow reported that home values are climbing at a rapid month-over-month rate in the major and most expensive US metros. Prices have gone up by 3.3% in San Jose, 2.7% in San Francisco, 2.4% in Seattle, 2.1% in San Diego and 2.0% in Los Angeles. However, the price appreciation, in this case, becomes a dilemma for many since would-be homebuyers cannot pursue these markets due to overall high prices while existing homeowners continue to be locked into their mortgages as it is extremely costly for them to buy a home at current rates. Another issue with these markets is that the inventory has not yet grown since the pandemic’s outbreak which has driven more competition for few choices. You can also take a look at the cities with the highest home price increases since the pandemic.
Meanwhile, home price appreciation has toned down in the South where inventory has recovered since the pandemic. This has resulted in less competition and has controlled extremely high prices. On a monthly basis, metros including New Orleans, San Antonio, Tampa, Orlando, and Jacksonville experienced the slowest but still fairly solid price growths. New Orleans and Austin have seen a rise in the new listings of existing homes as compared to the pre-pandemic period.
Top Homebuilders in the US
Americans can look for reputable homebuilders such as M.D.C. Holdings, Inc. (NYSE:MDC), Century Communities, Inc. (NYSE:CCS), and LGI Homes, Inc. (NASDAQ:LGIH) to settle in some of the most convenient and desirable locations across the country. Additionally, they can view some of the best states for first-time homebuyers.
M.D.C. Holdings, Inc. (NYSE:MDC) operates Richmond American Homes which is one of the largest US homebuilders. The homebuilder has operations in multiple states including Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington. On April 18, the company’s subsidiary Richmond American Homes of Arizona, Inc. announced its new community in Tucson. The new community ‘Seasons at Blackhawk’ is located near downtown Tucson. Parks, playgrounds, and trails will be offered as amenities to residents. Tucson International Airport and Davis Monthan Air Force Base can also be accessed.
Century Communities, Inc. (NYSE:CCS) is a major American homebuilder that is engaged in the construction, innovative marketing, and sale of homes for diverse buyers. On April 17, the company announced that it has initiated sales of single-family homes at its new Seattle-area community ‘Lakeview Terrace’. Those who wish to live in the community can easily travel to downtown Seattle, Renton’s city center, Boeing Renton Factory, and Newcastle Beach Park. A playground, walking trails, and views of Lake Washington are some of the amenities that can be enjoyed.
LGI Homes, Inc. (NASDAQ:LGIH) engages in the design, construction, and sale of homes across 36 markets in 21 states. On April 16, the homebuilder reported that it opened its first community in the St. Cloud market. While the new community ‘Parkside’ is only 15 minutes away from downtown St. Cloud., it also offers easy access to Minneapolis. Homes in the community have been priced from the $370,000s.
Other than M.D.C. Holdings, Inc. (NYSE:MDC), Century Communities, Inc. (NYSE:CCS), and LGI Homes, Inc. (NASDAQ:LGIH), some of the largest builders in the US have been previously covered. Now that we have taken a look at the US real estate situation, let’s move to the 20 affordable, promising cities to buy real estate in 2024.
An aerial view of a real estate property with multiple buildings and pavement in the foreground.
Our Methodology:
In order to compile a list of the 20 affordable, promising cities to buy real estate in 2024, we looked at the year-over-year price growth in home value from 2023 to 2024 and the average home value in the city. Cities that experienced positive price growth and had average home values below the median home value in the US were shortlisted. Please note that the median home value in the US is $354,179, as of March. Data for both metrics has been sourced from Zillow.
The 20 affordable, promising cities to buy real estate in 2024 are ranked in ascending order of their 1-year price appreciation, primarily, and average home value, secondarily.
20 Affordable, Promising Cities to Buy Real Estate in 2024
20. Fort Wayne
1 Year Price Appreciation: 7.5%
Average Home Value: $231,064
The city of Fort Wayne is based in northeastern Indiana. As of March, home prices in the city have appreciated by 7.5%. The city’s average home value of $231,064 is below the national average.
19. Philadelphia
1 Year Price Appreciation: 7.7%
Average Home Value: $349,795
Philadelphia is an attractive market for purchasing real estate in 2024. As reported by Zillow, home prices have experienced a growth of 7.7% since 2023.
18. Green Bay
1 Year Price Appreciation: 7.7%
Average Home Value: $292,367
Green Bay is located in the state of Wisconsin. The city’s current average home value of $292,367 is affordable. Furthermore, the city is a promising real estate market since home values have also been witnessing positive changes over the past year.
17. Reading
1 Year Price Appreciation: 7.9%
Average Home Value: $276,304
Home values have been appreciating in the city of Reading. The city is situated in the southeastern part of Pennsylvania and offers an average home value of $276,304, as of March. This makes Reading a good city for buying real estate in 2024.
16. Flint
1 Year Price Appreciation: 8.0%
Average Home Value: $172,739
Flint is in Genesee County, Michigan. The city boasts an average home value of $172,739. Simultaneously, Flint’s home prices have grown since 2023.
15. Allentown
1 Year Price Appreciation: 8.1%
Average Home Value: $320,148
The 1-year growth in Allentown’s average home value was recorded at 8.1% in March. Additionally, the current average home value in the city is lower than the national average.
14. Erie
1 Year Price Appreciation: 8.2%
Average Home Value: $186,042
The 20 affordable, promising cities to buy real estate in 2024 rank Erie as well. The city is located in Pennsylvania and has witnessed a modest positive change in its home values over the past 1 year.
13. Peoria
1 Year Price Appreciation: 8.2%
Average Home Value: $141,917
Illinois hosts the US city of Peoria. Those who wish to buy real estate in a cheap yet attractive housing market in 2024 can resort to the city.
12. Canton
1 Year Price Appreciation: 8.5%
Average Home Value: $191,088
The Ohio-based city of Canton experienced an appreciation of 8.5% in its home prices between 2023 and 2024. As of now, $191,088 is the average home value in the city which is quite affordable.
11. Toledo
1 Year Price Appreciation: 8.6%
Average Home Value: $178,470
Toledo is situated in Lucas County, Ohio. The city is one of the most affordable and promising real estate markets since the home prices have appreciated by 8.6% since 2023 while the average home value is as low as $178,470.
10. Savannah
1 Year Price Appreciation: 9.3%
Average Home Value: $329,917
Savannah is a populous city located in the state of Georgia. Between 2023 and 2024, home prices in the city have grown by 9.3% which deems the market attractive for real estate investment.
9. Rochester
1 Year Price Appreciation: 9.4%
Average Home Value: $235,073
Rochester is another city in New York that can be pursued as an attractive and affordable city to buy real estate in 2024. According to Zillow, the year-over-year appreciation in the city’s home prices has been 9.4%.
8. Binghamton
1 Year Price Appreciation: 9.5%
Average Home Value: $167,385
The city of Binghamton is a part of New York. As of March, the city boasts an average home value of $167,385 which is cheap. 1 year home price appreciation in Binghamton was recorded at 9.5% in March.
7. Atlantic City
1 Year Price Appreciation: 9.9%
Average Home Value: $340,093
Atlantic City is based in New Jersey. While the average home price in the city is $340,093, home prices have grown over the past year which indicates an attractive market for real estate investment.
6. Knoxville
1 Year Price Appreciation: 10.1%
Average Home Value: $333,234
Knoxville is situated in Knox County, Tennessee. Between 2023 and 2024, home prices in the city have appreciated by 10.1%. The city’s average home price is below the national average which makes its real estate affordable yet promising.
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Disclosure: None. 20 Affordable, Promising Cities to Buy Real Estate in 2024 is originally published on Insider Monkey.