Here are the top 10 undervalued metro housing markets in the country.
- Soaring home prices have made a home purchase unaffordable for a typical first-time buyer.
- Counties in the Midwest and South have the cheapest median home prices.
- Here is a list of the top undervalued 10 markets where they are expected to experience stronger price appreciation relative to other markets in 2022.
The median home price in the United States for active listings grew to a new all-time high of $392,000 in February, according to the Realtor.com Monthly Housing Trends Report. The surge in home prices has been due to the low interest rates, growing demand, and dwindling supply.
The National Association of Realtors (NAR) estimates that nearly 1 million renter households were priced out of the housing market. As a result, the share of first-time home buyers has fallen to 26%, an eight-year low. According to the NAR’s Housing Affordability Index, the soaring prices have made a home purchase unaffordable for a typical first-time buyer.
Fortunately, there are some (relatively) affordable places to find. While prices are still increasing in all regions of the country, there are also some deals out there.
Both the West and East coasts have the most expensive real estate, with median home prices well over $1,000,000 in places like New York County (Manhattan) and counties in the Bay Area of California. The median prices in the Midwest and South, however, are less than $150,000.
Here are the counties with the highest median home values in the 4th quarter of 2021:
- Nantucket County, Massachusetts: $1,370,520
- New York County, New York: $1,306,210
- Santa Clara County, California: $1,253,400
- San Mateo County, California: $1,247,070
- San Francisco County, California: $1,230,800
Here are the counties with the lowest median home values in the 4th quarter of 2021:
- Todd County, South Dakota: $43,956
- Mellette County, South Dakota: $39,349
- McDowell County, West Virginia: $41,262
- Kent County, Texas: $43,965
- King County, Texas: $46,091
Metros with the cheapest places to buy a home
While certain counties have the cheapest prices, chances are slim that folks will want to move to locations where the population is in decline and there are few job prospects. In its newest report, 2022 Housing Market Hidden Gems, the NAR named the top 10 undervalued markets. NAR only considered metro areas with a population of at least 200,000, metro areas with positive job and wage growth, as well as markets where they are expected to experience stronger price appreciation relative to other markets in 2022. These cities are listed in alphabetical order:
- Dallas-Fort Worth, Texas
- Daphne-Fairhope-Farley, Alabama
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Huntsville, Alabama
- Knoxville, Tennessee
- Palm Bay-Melbourne-Titusville, Florida
- Pensacola-Ferry Pass-Brent, Florida
- San Antonio-New Braunfels, Texas
- Spartanburg, South Carolina
- Tucson, Arizona
The housing market is expected to remain competitive, so it is important not to rush into purchasing a home you can’t afford. The decision to buy a home should be based on your personal financial situation. Prospective home buyers also need to consider other expenses of homeownership, including property taxes, maintenance fees, and homeowners insurance.
A historic opportunity to potentially save thousands on your mortgage
Chances are, interest rates won’t stay put at multi-decade lows for much longer. That’s why taking action today is crucial, whether you’re wanting to refinance and cut your mortgage payment or you’re ready to pull the trigger on a new home purchase.
The Ascent’s in-house mortgages expert recommends this company to find a low rate – and in fact he used them himself to refi (twice!). Click here to learn more and see your rate. While it doesn’t influence our opinions of products, we do receive compensation from partners whose offers appear here. We’re on your side, always. See The Ascent’s full advertiser disclosure here.