Midwest Housing Markets Outpace Former High-Flyers as Affordability Lures Buyers

The Midwest has emerged as the hottest housing market as former high-flyers like Phoenix and Las Vegas cool off. Midwest markets like Kansas City, Columbus, and Cleveland lead in price appreciation over the past year.

The Midwest stayed affordable from 2012-2019 while Sunbelt markets boomed. Low rates and tight supply have now made the Midwest a relative bargain.

Mortgage rates have risen from under 3% to over 7%, hammering affordability. But the Midwest didn't have as big of pandemic price spikes.

Midwest inventory is ultra tight with just 2-3 months' supply in cities like Pittsburgh. Less new construction and fewer move-up buyers contribute to lean listings.

While national price appreciation may slow to 4% next year, Midwest metros could see 6% gains. Their affordability edge amid low supply points to continued outperformance.