A Decade of Soaring Home Prices: Where Affordability Still Thrives

By: Jesse Priddy

It is no secret that housing prices have increased sharply over the past decade. In Q3 2024, the national median home price stood at $418,700—almost double the national median of $217,100 in 2014. This increase reflects the rapid appreciation seen in many metropolitan areas, driven by a combination of factors, including limited housing inventory and increased demand. In fact, of 180 metropolitan areas measured, 81 saw their median home price more than double since Q3 2014. This increase in home prices also translates into substantial wealth gains for existing homeowners, underlying the critical role homeownership plays in building long-term financial security. Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.

However, despite the significant rise in prices nationwide, certain areas remain relatively affordable compared to other parts of the country. 

Those metro areas are as follows:

These pockets of affordability often feature lower costs of living, making them more accessible for first-time buyers or those seeking more budget-friendly options. Although these areas experienced a median price increase of above 150% since Q3 2014, they still maintain a median price below that of the current (Q3 2024) national median of $418,700. Interestingly, Ocala, Florida, experienced the highest price increase, yet its median home price remains just $71,300 above the national median from a decade ago. Furthermore, all but one of these areas are located in Florida.

As expected, the monthly mortgage payments in these areas fall below the Q3 national median of $2,137. These estimates are based on a 6.59% mortgage rate (as reported by Freddie Mac) with a 20% down payment. 

The affordability gap is increasingly influencing migration patterns and economic opportunities as many Americans relocate to areas with more attainable housing options. As highlighted in a previous blog post, from July 2022 to July 2023, Florida experienced the highest net migration in the nation, with a gain of 372,870 people. This influx was primarily fueled by the state's lower cost of living and more affordable housing options.

With the past decade of rising home prices, buyers are looking for more affordable areas to start their homeownership journey. As housing affordability continues to shape migration patterns, these areas may provide an opportunity for first-time home buyers or those looking for more cost-effective alternatives to the nation’s larger, pricier metropolitan areas.