Currently Reading

Affordable Homes are Increasing in Value Fastest Nationwide

Advertisement
Market Data + Trends

Affordable Homes are Increasing in Value Fastest Nationwide


April 1, 2021
Stucco homes in Phoenix, AZ
Photo: MAXFX

High demand for affordable homes has pushed prices up faster than top-tier home values in the majority of markets, reports Zillow. Homes in the entry-level price segment of the market nationally have increased the fastest in value during the past year, but some markets are seeing the reverse. Nationwide, annual home value growth for homes in the bottom one-third of the market increased 9.8% last month while the highest priced tier of the market saw values increase 9.5%. Boise, Phoenix, and Spokane experienced the fastest annual growth for affordable homes.

Among a wider pool of the nation’s 100 largest markets, bottom-third home values grew the fastest year-over-year in February in Boise (27.2%), Phoenix (19.4%) & Spokane (18.4%). Rapid growth in the most-affordable segment of the market is not a particularly new phenomenon — these homes have long been in high demand from budget-conscious buyers, and it can be difficult for builders to profitably build in these segments, further restricting already-tight inventory. But a widening gap between annual growth in the top and bottom segments of the market is illustrative of the intense heat specific to the bottom of an already generally hot market — particularly in a handful of typically more-affordable Midwestern metros.

The spread of home value growth between the low-, middle-, and top-tier market segments is increasing in metros including Cleveland, Detroit and Indianapolis. For example, the bottom third of the market in Cleveland grew by 13.1% and the top third grew by 9.8% year-over-year in February, a gap of 3.3 percentage points. That gap has more than doubled in Cleveland — a year ago, in February 2020, the gap between top and bottom tiers was 1.6 percentage points (5.6% annual growth in the bottom tier, 4% at the top).  This widening gap reflects a surge in demand for starter homes relative to top-tier homes — potentially related to, among other factors, first-time buyers taking advantage of historically low interest rates. 

Read More
 

Related Stories

Construction

4 Signs the Housing Market Could Cool Down

Financial services company Jefferies says the current market is poised for a healthy and much-needed slowdown in the near future. Rising home…

Coronavirus Resources and Information

Will Vaccines Boost Housing Inventory?

Pending existing home sales dipped more than 10% from January to February, but Zillow’s president says the market remains hot and could be even…

Market Data + Trends

Affordability Remains Top Struggle for Buyers

Homebuyers are entering the most competitive spring market in decades, with affordability being the largest hurdle. The national median sale price…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.