Mortgage Rates Are Falling: 20 Housing Markets Offering the Best Deals

Mortgage rates are falling, bringing a wave of optimism to the housing market. As of July 3, the average rate for a 30-year fixed-rate mortgage was 6.95%, down from 7.79% in October 2023, according to Freddie Mac. This trend is welcome news for potential homebuyers who have been grappling with high costs and limited inventory.

The Impact of Falling Mortgage Rates on the Housing Market

The recent decline in mortgage rates offers a glimmer of hope for house hunters. With rates dropping below the 52-week average, buyers might find it easier to secure financing. The median existing-home price hit a record $419,300 in May, a 5.8% increase from the previous year.

Despite this, the affordability of homes has reached its lowest point since 2007 due to rising mortgage, tax, and insurance costs, which now consume 35.1% of the average homeowner’s income, well above the 28% guideline​.

Mortgage Rates are Falling in these Cities 

While high mortgage rates and soaring home prices have made the market challenging, there are still cities where homes remain relatively affordable. Here are 20 housing markets with median home prices well below the national median:

Baltimore, Maryland

Median listing home price: $224,900
Price per square foot: $165
Baltimore offers a rich history, vibrant arts scene, and waterfront attractions. Known for its diverse neighborhoods, it combines urban living with suburban affordability.

Buffalo, New York

Median listing home price: $215,000
Price per square foot: $156
Buffalo, known for its architectural gems and close proximity to Niagara Falls, has a revitalized waterfront and burgeoning cultural scene, making it an attractive and affordable place to live.

Cleveland, Ohio

Median listing home price: $135,000
Price per square foot: $102
Cleveland boasts a strong healthcare sector and a vibrant cultural life, with the Rock and Roll Hall of Fame and numerous parks and museums, offering an affordable urban living experience.

Des Moines, Iowa

Median listing home price: $240,000
Price per square foot: $206
Des Moines is known for its friendly community, excellent schools, and growing job market, particularly in insurance and finance, offering a balanced urban and suburban lifestyle.

Detroit, Michigan

Median listing home price: $93,300
Price per square foot: $82
Detroit is undergoing a renaissance with new businesses, restaurants, and cultural institutions, making it a city of opportunity with remarkably affordable housing options.

Fort Worth, Texas

Median listing home price: $360,000
Price per square foot: $187
Fort Worth blends modern amenities with a rich Western heritage, offering cultural attractions like the Kimbell Art Museum and a thriving job market in various industries.

Indianapolis, Indiana

Median listing home price: $275,000
Price per square foot: $149
Indianapolis, known for its sports culture and vibrant downtown, provides a range of affordable housing options and a family-friendly atmosphere.

Jacksonville, Florida

Median listing home price: $319,900
Price per square foot: $194
Jacksonville features extensive parks, beautiful beaches, and a low cost of living, making it an ideal location for affordable coastal living.

Kansas City, Missouri

Median listing home price: $275,000
Price per square foot: $166
Kansas City is famous for its jazz heritage, barbecue cuisine, and numerous fountains, offering a lively cultural scene and affordable housing.

Louisville, Kentucky

Median listing home price: $285,000
Price per square foot: $163
Louisville, home of the Kentucky Derby, combines Southern charm with a growing food and arts scene, providing affordable homes in a vibrant community.

Memphis, Tennessee

Median listing home price: $230,000
Price per square foot: $140
Memphis, known for its music history and delicious cuisine, offers affordable housing along with a strong sense of community and cultural richness.

Montgomery, Alabama

Median listing home price: $215,000
Price per square foot: $110
Montgomery, steeped in civil rights history, features affordable living, historic neighborhoods, and a variety of cultural and recreational opportunities.

Milwaukee, Wisconsin

Median listing home price: $199,900
Price per square foot: $155
Milwaukee combines a strong industrial heritage with a vibrant cultural scene, including renowned breweries and a scenic lakefront.

Oklahoma City, Oklahoma

Median listing home price: $300,000
Price per square foot: $168
Oklahoma City offers a thriving economy, family-friendly attractions, and a low cost of living, making it a great place to find affordable housing.

Omaha, Nebraska

Median listing home price: $344,500
Price per square foot: $173
Omaha is known for its economic stability, excellent educational institutions, and a welcoming community, providing affordable housing in a city with big opportunities.

Rochester, New York

Median listing home price: $159,900
Price per square foot: $117
Rochester offers beautiful parks, a strong arts community, and affordable living, with access to the scenic Finger Lakes region.

St. Louis, Missouri

Median listing home price: $209,900
Price per square foot: $151
St. Louis is known for its iconic Gateway Arch, diverse neighborhoods, and a robust cultural scene, providing affordable living in a historically rich city.

St. Paul, Minnesota

Median listing home price: $300,000
Price per square foot: $212
St. Paul, part of the Twin Cities, offers a high quality of life with excellent schools, parks, and cultural institutions, all at an affordable cost.

Toledo, Ohio

Median listing home price: $125,000
Price per square foot: $99
Toledo boasts a strong industrial base, a revitalized downtown, and affordable housing, making it a city of opportunity with a rich cultural heritage.

Wichita, Kansas

Median listing home price: $300,000
Price per square foot: $139
Wichita offers a low cost of living, a diverse economy, and numerous recreational opportunities, providing an affordable and attractive place to live.

The Future Outlook

With mortgage rates falling, more buyers might re-enter the market, potentially boosting home sales and stabilizing prices. Increased housing supply, as noted by NAR Chief Economist Lawrence Yun, is expected to benefit consumers by providing more options and mitigating price gains​.

As mortgage rates continue to fall, the housing market shows signs of becoming more accessible for prospective buyers. Those looking to purchase homes in affordable markets like Baltimore, Cleveland, and Des Moines may find opportunities they hadn’t previously considered. While challenges remain, particularly regarding affordability, the current trend offers a ray of hope for many aspiring homeowners.