The world moves in cycles.
Whether it’s the changing seasons, the movement of the Earth around the sun, the six-lane ring roads that hobble thousands of motorists on the edge of cities, or the recycling of cultural trends, every generation feels the joy or disgust of rediscovering the music and fashion of their youth.
Real estate also goes through cycles, with homebuyers recently returning to the Midwest.
jeff tucker
“The Midwest is kind of the last affordable region to survive,” Jeff Tucker, Windermere’s chief economist, told Inman. “Housing prices were already quite challenging in the Northeast and West, including the Mountain West, and rising mortgage rates compounded those challenges for homebuyers.”
The Midwest, which includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin, dominates Redfin, Realtor.com and Zillow’s 2026 Affordability and First Time Home Buyer Lists.
Adding fuel to the fire, The Atlantic’s recent feature on the region has economists and housing experts teasing the Midwest’s unusual combination of affordability, job opportunities, stable quality of life and progressive housing policies poised for decades of sustainable growth.
“for [homebuyers] “Even when you consider different career and income trajectories, the Midwest really remains the best option…It’s like the ’90s dream comes to life in the Midwest. You can move there and buy your own place on a more reasonable schedule, and all the stars don’t necessarily have to align to make that happen, like landing a dream job at a dream salary,” he added. Buying a house doesn’t seem like such a risky move. ”
affordability factor
The Midwest has several things working in its favor. But the most obvious attraction for homebuyers is housing affordability.
An analysis of Census Bureau and Federal Financial Institutions Examination Council (FFIEC) data for 2025 reveals that housing costs in the Midwest are, on average, about 30 to 50 percent lower than those on the coasts. The National Association of Realtors’ latest regional snapshot of existing homes provides a more accurate comparison, with median prices significantly higher in the Northeast ($494,500), South ($362,600), and West ($613,400) than the Midwest ($315,500).
The Midwest has the lowest standards for homeownership. Homebuyers need a minimum gross annual household income of approximately $91,000 to purchase a median-priced home. And more than a third of Midwestern households meet that criteria, with 37% earning more than $100,000 a year, according to the most recent year of American Community Survey data.
Visualized by Inman and Claude.
Orphe Divounguy, senior economist at Zillow, said some markets in the Midwest are particularly friendly to Gen Z and Millennial buyers, with Indianapolis, Detroit and St. Louis standing out as top choices.
orphée divonghi
He said these markets have favorable median rents, making it easier for aspiring homeowners to put aside money for a down payment. When you’re ready to buy, these cities also have a high share of affordable properties (i.e., median income earners spend less than 30 percent of their income on housing), meaning there’s less competition for those properties.
These markets also skew younger, with more than a third of households being between the ages of 29 and 43.
“The Midwest market has a significant percentage of people in the homebuying demographic, and that’s part of the story here,” he said. “You want to be around like-minded people who are your age. That helps build community.”
This type of affordability will lead to net population growth in seven of the 11 states that make up the Midwest, with Indiana, Ohio, Wisconsin and Minnesota expected to see the largest increases from 2024 to 2025, according to a March 2026 report from the Council of State Governments. Net internal migration in the region was 16,000 in 2025, a significant improvement from 2021 and 2022, when net domestic losses reached 175,000.
Lisa Sturtevant
Lisa Sturtevant, chief economist at Bright MLS, said affordability is not only attracting new entrants, but also creating a boomerang effect of Midwesterners returning to their hometowns. And a growing proportion of young people are choosing to avoid going to the coast and start their college or professional careers at home.
“I think the Midwest is also really interesting because I can imagine some people are going back home, and I think there’s a cultural shift happening in that adult children want to be closer to their parents and parents want to be closer to their adult children,” she said. “When I graduated from college in 1994, I remember wanting to get as far away from my parents as possible. That’s not the case now.”
“part of” [that shift] It’s cultural, but it’s also partly inevitable. “In terms of affordability, most of these coastal markets are out of reach if you want to buy a home. And with remote work becoming more possible, you have more options to earn a great income while staying at home,” she added. Will that continue? I don’t know that yet. ”
Removal of “viaduct status” status
Although the Midwest has long been ignored as a group of “elevation states,” the region was once the manufacturing center of the United States and the launching pad for several cultural revolutions.
Kansas City was key to the development of jazz and blues, Detroit was home to Motown and the development of popular music, and Minneapolis artists like Prince mixed funk, rock, and new wave to create the “Minneapolis sound.” No one can forget the region’s contributions to sports and food culture, with Chicagoans fiercely defending the monster that is deep-dish pizza.
Now, new entrants are more appreciating and expanding on the Midwest’s cultural capital, Tucker said. The Windermere economist has seen this play out inside his own circle, with one friend deciding to stay in the Twin Cities after college and build a successful career in dance that lasted 15 years.
Tucker said that career might have been much more difficult to achieve in New York or Los Angeles, where artists often juggle multiple jobs to make a living.
Visualized by Inman and Claude.
“She was able to pursue this lifestyle because of the affordability of living in Minneapolis. It’s much more practical to take that kind of risk,” he says. “For a while, the metros in coastal cities like Seattle and New York were too expensive for the general public, especially artists. Now, the people who built the scenes in those cities are leaving for places like Chicago, Minneapolis, Cleveland, and Cincinnati.”
“You almost don’t have to go to New York, Boston, San Francisco or other coastal markets to have that kind of success anymore,” he added. “People are realizing that the Midwest is not only cheaper, but also has a higher quality of life.”
Sturtevant said many state leaders are taking advantage of this increased attention and investing millions of dollars in advertising campaigns to signal the state’s transformation from an elevated state to a desirable destination.
“I think marketing helped make this change happen,” she said. “My daughter said she was watching something on Netflix or another streaming platform and saw an ad for Ohio. It said two of the top three most affordable communities in America are here, and it also had a big map of Ohio. It promoted Ohio as a destination. Michigan and a few other states are doing the same thing.”
Tucker echoed Sturtevant’s insights, saying local governments across the Midwest are ramping up efforts to organize their cities in ways that appeal to newcomers, especially those from coastal areas.
“This is an interesting trend,” he said. “Many of these cities are embracing their cores, not just their downtowns, but other neighborhoods and areas that have interesting histories and atmospheres. And I think that’s accelerating people’s interest in the Midwest.”
flying too close to the sun
The Midwest is at the beginning of an exciting new cycle of growth, but one can’t help but wonder if the region and its major cities (Chicago, Columbus, Indianapolis, Detroit, Milwaukee, Kansas City, Minneapolis, Cleveland, and St. Louis) are on track to become real estate’s next Icarus.
Early in the pandemic, remote work, lowest mortgage rates, and affordability prompted a mass exodus to the Sunbelt. According to the Federal Housing Finance Agency, the region had the highest net population growth from 2020 to 2023, led by Florida (1.168 million), Texas (947,000), North Carolina (376,000), South Carolina (272,000), Arizona (270,000) and Georgia (254,000).
But since then, home value growth has slowed in both the Sunbelt and Midwest.
Visualized by Inman and Claude.
Although rental and condo prices are rising in the Midwest’s largest market, Tucker, Sturtevant and Devonguy said they don’t think the region will be as much a “victim of success” as the Sunbelt.
“It all depends on how quickly housing construction activity can respond to a significant increase in demand for activity. Chicago is currently experiencing the fastest rent increases in the nation. It’s still relatively affordable, but there isn’t enough building activity to keep up with demand,” he said, citing the city’s geography as a major challenge. “But in other markets like Columbus, [Ohio]Indianapolis has seen an even stronger response to building new homes and rehabilitating older inventory. ”
Sturtevant said building outward can be difficult for most established Midwest markets. Because those cities are “immediately surrounded by built-in suburbs” and residents may not embrace having a “Midwestern character.” [their] In such cases, Sturtevant said local councilors have ample opportunity to increase stock through “light contact density.”
“The city of Minneapolis is trying this. They looked at their single-family neighborhoods and said, ‘Before, we only allowed you to build single-family homes, but now we’re going to allow you to build duplexes, triplexes, four-family homes. They basically have the same footprint, but they can be divided into three units,'” she said. “Initially, this wasn’t easy for Minneapolis residents, and it still isn’t. But this kind of ‘light touch density’ seems like a good way to remain affordable for a Midwestern city.”
Tucker said housing policy is key to maintaining the Midwest’s dominance, noting that lawmakers in the region would be wise to learn from the mistakes of coastal legislators in reforming zoning laws.
“California is just kind of slamming this down, but what they keep discovering is that it’s a very tightly intertwined mix of different things.” [zoning] rule. They skipped red tape for some things, only to realize they needed to cut red tape for other things. It took me 6 or 7 years to get it. [accessory dwelling unit] Because of these policy challenges, the supply engine is really running smoothly. ”
“That’s all Midwestern cities can learn from the struggles of California, Seattle, and Portland. [Oregon]”I think these cities will continue to grow. There’s a real virtuous cycle happening right now with an influx of young people and that adding to the growth of cities and regions. I hope that places like New York and Seattle follow a similar trajectory and become more affordable for everyday people. I think there’s room for all of us to succeed.”
Email Marian McPherson
