The Midwest housing market continues to hold strong, with average housing prices increasing in 2022 at various rates depending on the location. Moreover, fewer homes are on the market, which creates more demand.
However, with the rising mortgage rates and far fewer home sales being closed, the market is showing signs of cooling down (eventually). Since houses within the Midwest area are, on average, still on the market for a short period, a cooldown will likely not happen for the rest of the year and early 2023.
What States Are Located in the Midwest?
States in the Midwest:
- North Dakota
- South Dakota
- Minnesota
- Michigan
- Illinois
- Kansas
- Iowa
- Indiana
- Missouri
- Nebraska
- Ohio
- Wisconsin
Housing Market Trends In The Midwest
The Midwest housing market is doing considerably better than other areas in the United States.
Many regions within the Midwest are still seeing an increase in housing prices, especially in metropolitan areas. According to AddressScoop.com, similar housing market trends can be found in other major cities within the Midwest, such as the Sioux Falls real estate market.
You can see an increase in other Midwest locations. For example, housing prices increased almost 5% from September 2021 to September 2022 in the Twin Cities region (Or the Metropolitan area of Minnesota, which includes Saint Paul and Minneapolis), Chicago, Illinois, and Milwaukee, Wisconsin, saw about the same price increase from October 2021 to October 2022.
Supply in inventory in Metropolitan areas such as Kansas City, Missouri, Wichita, Kansas, and Omaha, Nebraska, has been still competitive throughout the Midwest region, making it a seller’s market despite the high-interest rates.
The average number of days that a home remains on the market before being sold throughout the more populated Midwest areas vary greatly. In the Greater Cincinnati, Ohio area, homes stay on the market for well over 100 days on average. However, in Detroit,Michigan homes are on the market, on average, 78 days before being sold. Days on the market vary throughout other areas in the Midwest, such as Indianapolis, Indiana, Columbus, Ohio, and Saint Louis, Missouri.
Why The Midwest Housing Market Is Doing Better Than The National Average
While the market is slowing down and homes are on the market longer before being sold, we are still seeing a low supply of inventory and a small increase in the average price of a home in many of these Midwest metropolitan areas.
Midwest home values will likely not fall because, in the Midwest, there wasn’t a huge run-up last year like other markets within the United States. Thanks to the affordability of Midwest housing and because the Midwest is a nice place to live, the Midwest real estate market is taking longer to cool down than other markets. Additionally, it’s a great region for renters to invest in.
Midwest Housing Market Predictions For the End of 2022 and Beginning of 2023
While the mortgage rates are rising, the demand for houses is still high as the market is even more undersupplied than last year. As a result, housing prices in the Midwest will likely stay the same or steadily rise at a much slower rate because of the competitive seller’s housing market but high-interest rates.
Additionally, high-population areas like the cities listed below have even more competitive seller markets.
The population of some of the largest cities in the Midwest (2021):
- Milwaukee- 569,330
- Chicago- 2.697 million
- Indianapolis- 882,039
- Cincinnati – 308,935
- Cleveland- 367,991
- Omaha- 487,300
- Columbus- 906,528
- Detroit- 632,464
- Kansas City, Missouri- 508,394
- Minneapolis- 425,336
- Saint Paul- 307,193
- Sioux Falls- 196,528
- Fargo- 126,748
- Saint Louis- 293,310
- Wichita- 395,699
Source: United States Census Bureau
Is It A Buyer’s or Seller’s Market in the Midwest?
The Midwest housing real estate market is still incredibly competitive despite the high-interest rates and remains a seller’s market as there is more demand than supply. For example, In September, the Twin Cities housing market had 1.9 months of inventory, an almost 19% decrease since last year. The higher interest rates contribute to the increased market time, but homes sell at a highly competitive rate with low inventory.
Is it A Good Time to Invest in Midwest Real Estate?
The Midwest area has recently attracted interested investors and homebuyers because of its affordable market. In addition, the Midwest area is diverse and brings all sorts of renters depending on what the location has to offer.
With the strong job market and relatively high demand for housing, the Midwest area is a great area to invest in real estate in the coming months when done correctly.
Article Summary
There is still a low inventory of homes within the Midwest, which makes this housing market is still strong despite high-interest rates. In addition, the imbalance of available homes versus interested buyers in most of the Midwest makes this market warm (if not hot) and a dream for home sellers.
Therefore, we predict the Midwest market will still be a seller’s market going into 2023.
