At the End of 2023, You Won’t Be Able To Afford a Home in these Places

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With high interest rates making mortgage loans more expensive than they’ve been in 16 years, many people are putting off buying a house until money becomes cheaper to borrow. But depending on where they want to live, prices in currently affordable cities might be out of reach by the time interest rates cool off.  

Using Zillow home value data and projections, GOBankingRates identified the cities where typical home values are below average now, but probably won’t be for long. Most won’t be on the wrong side of average until 2025, but a handful will be expensive compared to the U.S. mean by next spring.

To find them, GOBankingRates took the cities where home values are currently below the national average of $333,910 and then checked them against their projected one-year growth rate, which is 1.7% for the country as a whole. The study then compared their projected mean values in 2024 and 2025 to the projected national averages of $339,586 and $345,359, respectively.

The results produced 11 cities where buyers had better act fast if they want to lock in a deal.

So before you put your home-buying plans on hold until loans are cheaper, keep in mind that you can refinance your mortgage in a few years when interest rates drop, but you can’t force rising home prices to move in the other direction.

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Looking at These 3 Cities? They’ll Be Out of Reach in 2024

Eight of the 11 cities that made it onto the list won’t be more expensive than the national average until 2025, but three are projected to break the barrier as early as next spring. In a trend that’s more reminiscent of 2021 than 2023, one city is expected to see its average home value jump by nearly 10% in just one year. 

Mountain Home, Idaho

  • March 2023 Home Value: $329,434
  • 1-Year Growth Projection: 9.8%
  • 2024 Projected Home Value: $361,719
  • 2025 Projected Home Value: $397,167

Ontario, Oregon

  • March 2023 Home Value: $329,664
  • 1-Year Growth Projection: 6.7%
  • 2024 Projected Home Value: $351,752
  • 2025 Projected Home Value: $375,319

Pittsfield, Massachusetts

  • March 2023 Home Value: $331,158
  • 1-Year Growth Projection: 2.6%
  • 2024 Projected Home Value: $339,769
  • 2025 Projected Home Value: $348,603

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You Still Have Time For the Other 8 — But Not Much

Home values in the remaining eight cities are projected to stay under the national average through 2024, but by the following year, they’ll have outpaced the U.S. mean. 

Atlantic City, New Jersey

  • March 2023 Home Value: $325,013
  • 1-Year Growth Projection: 4%
  • 2024 Projected Home Value: $338,013
  • 2025 Projected Home Value: $351,534

Daphne, Alabama

  • March 2023 Home Value: $328,632
  • 1-Year Growth Projection: 3.3%
  • 2024 Projected Home Value: $339,477
  • 2025 Projected Home Value: $350,680

Fort Morgan, Colorado

  • March 2023 Home Value: $328,833
  • 1-Year Growth Projection: 3.2%
  • 2024 Projected Home Value: $339,355
  • 2025 Projected Home Value: $350,215

Pahrump, Nevada

  • March 2023 Home Value: $320,184
  • 1-Year Growth Projection: 4.5%
  • 2024 Projected Home Value: $334,593
  • 2025 Projected Home Value: $349,649

Pocatello, Idaho

  • March 2023 Home Value: $318,396
  • 1-Year Growth Projection: 4.5%
  • 2024 Projected Home Value: $332,724
  • 2025 Projected Home Value: $347,696

Panama City, Florida

  • March 2023 Home Value: $321,252
  • 1-Year Growth Projection: 3.9%
  • 2024 Projected Home Value: $333,781
  • 2025 Projected Home Value: $346,798
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Rapid City, South Dakota

  • March 2023 Home Value: $330,732
  • 1-Year Growth Projection: 2.3%
  • 2024 Projected Home Value: $338,339
  • 2025 Projected Home Value: $346,120

Yakima, Washington

  • March 2023 Home Value: $325,233
  • 1-Year Growth Projection: 3.1%
  • 2024 Projected Home Value: $335,315
  • 2025 Projected Home Value: $345,710

More From GOBankingRates

Methodology: GOBankingRates took the overall U.S. median home value and projected its growth over 10 years using Zillow’s March 2023-24 one-year forecast. This projection was then compared to the projections of all available metros in the U.S. AND those metros that currently have home prices below the national median, with those rising above the national median in the next couple of  years (plus its projected growth rate over the same period) being deemed “a place you might not be able to afford.” For each metro over the next decade, GOBankingRates found the following factors: (1) year the metro will become “affordable”; (2) projected home value for that year; and (3) US average projected home value for that year. NOTE: GOBankingRates does not expect growth in home value to stay stagnant at one current rate for the next decade, but using these constant figures gives us an idea where certain markets are heading without unforeseen market disruptors in the future. All data used to conduct this study was compiled and verified on May 4, 2023.

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