16 affordable cities buyers should target as home prices rise but stay below peak levels
Mortgage rates and home values are up in the past year, though there are 16 US cities where property prices are below the median and falling.
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- Those who procrastinated on property purchases may be kicking themselves.
- Both mortgage rates and home values have risen in the past year.
- However, there are 16 US markets where prices are below the median and falling.
Although aspiring homeowners may have thought it was smart to put off purchases last year, that decision seems to have backfired.
Home affordability was challenged again in 2024, which real-estate analyst Ivy Zelman said was the toughest year for first-time buyers in four decades.
Mortgage rates are even more restrictive now than they were 12 months ago. Thirty-year fixed rates are at 6.9%, up from 6.6% last February and far higher than the late-September lows of 6.1%, while 15-year rates are at 6.1% compared to 5.9% at this time in 2024.
Home values have also risen substantially in that span. The going rate for existing single-family homes in the fourth quarter was $410,100, which was 4.8% higher than the year prior — though it's modestly lower than the peak of $422,100 in the second quarter.
Property price appreciation has been widespread. Last quarter, home prices were up in 89% of the 226 US markets tracked by the National Association of Realtors, the firm revealed in a February 6 report. And 14% of US cities saw sale values rise at a double-digit pace, which was twice the rate of the prior quarter. Only 23 cities saw prices head in buyers' direction.
Buyers hoping to settle down in the Northeast or Midwest may be most frustrated. Prices rose 10.6% and 8%, respectively, in those regions, versus 4% in the West and 2.1% in the South.
In the last five years, mortgage rates have almost exactly doubled from just under 3.5%, and median property prices are up 49.9%, according to the NAR. Home values will almost certainly never fall that far again, and it's unlikely that mortgage rates get back there anytime soon.
That's especially tough news for those who want to build home equity sooner rather than later.
"Renters who are looking to transition into homeownership face significant hurdles," said Lawrence Yun, the NAR's chief economist, in a statement for his firm's quarterly housing report.
16 top cities for buyers on a budget
Even in this challenging market, there are some silver linings for buyers.
Home affordability might not be spiraling, according to the NAR, which found that monthly mortgage payments were actually down for existing homes on 20% down payments. The firm said the typical rate was $2,124, which is 1.7% lower than in late 2023 and 0.8% less than in Q3. Owners also put less than 25% of their income toward mortgages — just below past levels.
Another promising sign is that there are several markets where houses are both cheaper than the national median and falling on a year-over-year basis.
Below are those metropolitan areas along with their yearly change and price history, with median sale values for every quarter of 2024, the projected level for 2024 as a whole, and the median value for the fourth quarter of 2023.
Vito Palmisano/Getty Images
Year-over-year price change: -5.7%
Median home price in Q4 2024: $350,000
Median home price in Q3 2024: $350,000
Median home price in Q2 2024: $380,000
Median home price in Q1 2024: $379,800
Projected home price throughout 2024: $364,000
Median home price in Q4 2023: $371,000
Emmanuel Psaledakis/EyeEm via Getty Images
Year-over-year price change: -5.6%
Median home price in Q4 2024: $332,200
Median home price in Q3 2024: $341,500
Median home price in Q2 2024: $338,800
Median home price in Q1 2024: $326,900
Projected home price throughout 2024: $335,500
Median home price in Q4 2023: $351,800
James Casil / EyeEm/Getty Images
Year-over-year price change: -4.7%
Median home price in Q4 2024: $265,400
Median home price in Q3 2024: $279,500
Median home price in Q2 2024: $270,100
Median home price in Q1 2024: $236,200
Projected home price throughout 2024: $266,800
Median home price in Q4 2023: $278,400
Kruck20/Getty Images
Year-over-year price change: -2.7%
Median home price in Q4 2024: $286,500
Median home price in Q3 2024: $297,700
Median home price in Q2 2024: $298,300
Median home price in Q1 2024: $292,700
Projected home price throughout 2024: $293,800
Median home price in Q4 2023: $294,600
mginley/Shutterstock
Year-over-year price change: -2.6%
Median home price in Q4 2024: $214,100
Median home price in Q3 2024: $229,000
Median home price in Q2 2024: $249,100
Median home price in Q1 2024: $205,100
Projected home price throughout 2024: $224,100
Median home price in Q4 2023: $219,800
Wikimedia
Year-over-year price change: -2.4%
Median home price in Q4 2024: $277,100
Median home price in Q3 2024: $282,300
Median home price in Q2 2024: $277,500
Median home price in Q1 2024: $267,200
Projected home price throughout 2024: $276,300
Median home price in Q4 2023: $283,900
Sean Pavone/Getty Images
Year-over-year price change: -2.4%
Median home price in Q4 2024: $327,400
Median home price in Q3 2024: $329,900
Median home price in Q2 2024: $335,000
Median home price in Q1 2024: $333,300
Projected home price throughout 2024: $330,200
Median home price in Q4 2023: $335,600
Official City of Wichita Falls, TX/Facebook
Year-over-year price change: -2.4%
Median home price in Q4 2024: $192,200
Median home price in Q3 2024: $186,500
Median home price in Q2 2024: $201,800
Median home price in Q1 2024: $188,900
Projected home price throughout 2024: $192,400
Median home price in Q4 2023: $196,900
DenisTangneyJr/Getty Images
Year-over-year price change: -2.2%
Median home price in Q4 2024: $225,100
Median home price in Q3 2024: $234,900
Median home price in Q2 2024: $234,900
Median home price in Q1 2024: $230,400
Projected home price throughout 2024: $231,900
Median home price in Q4 2023: $230,100
Sherman, Texas - Classic Town. Broad Horizon./Facebook
Year-over-year price change: -1.9%
Median home price in Q4 2024: $279,800
Median home price in Q3 2024: $305,300
Median home price in Q2 2024: $290,900
Median home price in Q1 2024: $284,600
Projected home price throughout 2024: $290,100
Median home price in Q4 2023: $285,200
Sean Pavone/Shutterstock
Year-over-year price change: -1.3%
Median home price in Q4 2024: $272,600
Median home price in Q3 2024: $278,000
Median home price in Q2 2024: $282,400
Median home price in Q1 2024: $266,600
Projected home price throughout 2024: $275,300
Median home price in Q4 2023: $276,300
John Coletti/Getty Images
Year-over-year price change: -1%
Median home price in Q4 2024: $406,000
Median home price in Q3 2024: $410,000
Median home price in Q2 2024: $420,000
Median home price in Q1 2024: $405,200
Projected home price throughout 2024: $412,500
Median home price in Q4 2023: $410,000
Shutterstock
Year-over-year price change: -0.9%
Median home price in Q4 2024: $330,500
Median home price in Q3 2024: $326,200
Median home price in Q2 2024: $325,300
Median home price in Q1 2024: $313,900
Projected home price throughout 2024: $324,000
Median home price in Q4 2023: $333,500
Getty Images
Year-over-year price change: -0.8%
Median home price in Q4 2024: $187,400
Median home price in Q3 2024: $189,300
Median home price in Q2 2024: $185,300
Median home price in Q1 2024: $179,100
Projected home price throughout 2024: $185,600
Median home price in Q4 2023: $188,900
Mark Wilson/Staff/Getty Images
Year-over-year price change: -0.8%
Median home price in Q4 2024: $359,500
Median home price in Q3 2024: $355,000
Median home price in Q2 2024: $365,000
Median home price in Q1 2024: $360,000
Projected home price throughout 2024: $360,000
Median home price in Q4 2023: $362,400
Sean Pavone/Getty Images
Year-over-year price change: -0.4%
Median home price in Q4 2024: $314,500
Median home price in Q3 2024: $321,100
Median home price in Q2 2024: $321,800
Median home price in Q1 2024: $305,800
Projected home price throughout 2024: $316,400
Median home price in Q4 2023: $315,700
