Frustrated by high home prices and rising mortgage rates, they are increasingly looking for more affordable places to live, such as Lafayette, Indiana.
The Lafayette metropolitan area was named the hottest emerging real estate market this spring, according to the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index. The top 20 markets are generally smaller cities offering affordable homes for sale, low costs of living and strong job markets. The index highlights a real estate market that economists believe will be strong this year.
"We continue to see this shift in demand for lower-priced markets, many of which are in the Midwest," said Hannah Jones, economic data analyst at Realtor.com." During the [COVID-19] pandemic, they didn't see the same price increases as the big cities, so they stayed affordable."
None of these housing markets were in the West, the region with the highest prices.
The index identifies the most important markets for buyers and investors alike among the 300 largest metropolitan areas. It looks at metros with strong demand for housing based on page views of local listings, the number of homes for sale, property taxes and the median number of days a home is on the market before it sells. It also considered metros with strong economies, a large number of well-paying jobs, a good quality of life, many small businesses and desirable amenities such as reasonable commuting hours. (Metros include major cities and surrounding towns, suburbs and smaller urban areas).
According to the latest data from Realtor.com, the median listing price for homes in the Lafayette metro area was $289,000, about a third below the national median of $424,000 in March.
Named after the American Revolutionary War hero, the Marquis of Lafayette, Lafayette's manufacturing hub is located about an hour northwest of Indianapolis and two hours southeast of Chicago. Big-name employers include Caterpillar, Subaru and Wabash National Corp. which makes refrigerated truck trailers. It is also home to Purdue University.
"Homes in Lafayette are significantly more affordable, and it's a strong economy," Jones said.
Of the top 20 emerging markets, only two - Manchester, N.H., and Knoxville, Tenn. - are priced above the national median, with Manchester consistently ranked as one of the hottest markets in the country. Only one market, Columbus, the capital of Ohio and home of Ohio State University, has a population of more than 1 million.
"These are some of the only markets where locals and first-time homebuyers can afford to buy a home based on local wages," Jones said.
