Who Can Afford a Home? Roughly 60% of the U.S. Could Be Frozen Out of Starter Homes, Warns S&P

Who can afford a home? Roughly 60% of the U.S. could be frozen out of starter homes, warns S&P

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Getting a foot in the door of the U.S. housing market could get much harder for a broader swath of households, even as the pandemic boom cools and home builders brace for a potential recession.

Low affordability already cut the bottom 40% of households out of the market for starter homes, according to a new S&P Global Ratings report, which forecasts 60% of households will be priced out by the end of 2025.

“Fortunately, for those households who already bought a home, more mortgages are fixed rate than adjustable rate, so they have less exposure to climbing rates in the future,” a team led by Beth Ann Bovino, S&P Global North American chief economist, wrote in a report Wednesday. “But prospective homeowners will be vulnerable to higher monthly payments.”

Bovino’s report gauged affordability as topping out when mortgage payments reach 25% of a household’s income, a figure that has long put homeownership out of reach for many in the lowest income brackets in America.

Specifically, the bottom one-fifth bracket, or households making up to about $27,000 a year, would need to spend at least 100% of their income to afford a monthly mortgage payment, according to the report.

For middle-income borrowers, mortgage payments already topped 26.7% of income in the first quarter, and are expected to climb to 31.4% in the fourth quarter, “leaving 60% of U.S. households out of the market.”

Suzanne Dershowitz, a staff attorney at Public Advocates, said that while the affordability crisis isn’t new, “We are seeing consolidation of massive profits in the hands of a few, at the expense of communities of color.”

The nonprofit California law firm and advocacy group focuses on housing, education and climate justice for low-income communities and people of color.

“What all this data shows is that our housing policies need to treat housing as a basic human need,” she said by phone. “Government regulation needs to focus on people, rather than housing as a commodity.”

S&P’s report pointed to the roughly 20% annual rise in home prices and a more “hawkish” Federal Reserve as key culprits of the housing “affordability crunch,” with the central bank’s inflation-fighting policies pushing 30-year mortgage rates to 5.18% in the second quarter, a 13-year high.

The Fed is expected to raise interest rates by another 75 basis points next week, and continue hiking rates aggressively this fall as it looks to tamp down inflation that hit a 41-year high of 9.1% in June. The yield on the benchmark 10-year Treasury note climbed back above 3% and stocks rallied sharply for the week.

Bovino’s team expects the benchmark mortgage rate to hit 5.42% by year’s end.

“Clearly, we are seeing a flattening out of the rate of home price appreciation right now,” said Buck Horne, housing sector analyst at Raymond James, by phone, but he also disagreed with the dire affordability picture painted by S&P’s team.

“There’s no question that affordability is a lot more challenged this year than last year, and prepandemic,” he said. “It certainly doesn’t mean the American dream of homeownership is dead.”

For one thing, the labor market remains strong and remote work has allowed some buyers to “solve for affordability with their feet,” by seeking out property in less expensive areas, other metros and suburbs, he said. Others have opted to take out adjustable-rate mortgages instead of the 30-year fixed standard.

“The market is in the process of adjusting,” Horne said, pointing to home builders that have been pulling back on unsold production.

“I don’t think we are going to have a housing crash.”

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NASCAR Driver Ricky Stenhouse Jr.’s Mansion Is This Week’s Most Popular Home

NASCAR Driver Ricky Stenhouse Jr.'s Mansion Is This Week's Most Popular Home


NASCAR driver Ricky Stenhouse Jr.‘s megamansion in Mooresville, NC, zoomed past the competition this week. The speed demon’s equestrian estate is this week’s most popular home on Realtor.com®.

The huge spread features European-style stables, custom stalls, and an illuminated and enclosed arena with a viewing area. A delightful outdoor area was designed for entertaining thanks to a vanishing-edge pool, cabana, and putting green. It’s a real glimpse inside the digs of a NASCAR superstar, and fans responded in droves.

Aside from Stenhouse’s superior digs, you also clicked on a mysterious California house featuring an area eerily dubbed “The Room,” a somewhat creepy home in Ohio that’s been unoccupied for decades, and a sprawling Florida mansion with Disney theme park–designed bedrooms.

For a full look at this week’s 10 most popular homes, simply scroll on down.

10. 436 State St, Bangor, ME

Price: $699,000
Why it’s here: 
Charming and historic, the Wilfred Mansur Home is well-known for its combination of old English, Gothic, Queen Anne, and shingle styles.

Built in 1893, this eight-bedroom home features extraordinary details, including a balustered veranda, carved white oak, paneled pilasters with lion’s head brackets, and wrought-iron archways. There are also six fireplaces, a copper butler’s sink, and stained-glass windows throughout the 5,734-square-foot home.

A carriage house could be used as an office or studio, or converted into space for rental income.

Bangor, ME


9. 7652 Kona Ct, Placerville, CA

Price: $1,050,000
Why it’s here:
This intriguing home went viral thanks to a mysterious space dubbed “The Room.”

Located on a cul-de-sac with canyon views, the 4,423-square-foot house features an abundance of windows, skylights, and storage space.

With floor-to-ceiling cabinets and shelves filling the walls of this custom room, there’s space to store every single item you own. Speculation ran wild online with theories about what was kept in The Room. But according to SFGate, the home was owned by an elderly woman who was a collector of books, DVDs, and VHS tapes.

Placerville, CA


8. 992 Osprey Ct, Palm Harbor, FL

Price: $1,899,000
Why it’s here: 
This gulfside home has a dramatic three-story foyer and two levels of wraparound decks to soak up the waterfront views.

With 4,231 square feet of living space, the spacious five-bedroom estate was designed for entertaining. It features a walk-in wet bar and separate wine and beverage refrigerators. The primary suite offers up dual closets, a window seat, built-in linen cabinet, whirlpool tub, and glass-block shower. An elevator provides easy access to all three levels. The property also comes with a private kayak ramp.

Palm Harbor, FL


7. 33550 Pacific Coast Hwy, Malibu, CA

Price: $225,000,000
Why it’s here:
It’s the massive home of former Disney CEO Michael Eisner. It was listed in May, but a recent spike in clicks propelled it onto our popularity list.

Does this jump in popularity bode well for what could be a record-breaking sale? Stay tuned!

Malibu, CA


6. 8446 State Route 14, Streetsboro, OH

Price: $175,000
Why it’s here: 
This affordable local landmark was custom-built in 1930, but it will need extensive TLC. The listing notes it has been “unoccupied for decades.”

Known affectionately as the “Little Palace,” this four-bedroom brick home offers 3,572 square feet of space. Historic features include archways, dramatic fireplaces, and high ceilings.

The property sits on a 5-acre lot in the historical center of Streetsboro. There’s a separate guesthouse that could be used as a home office.

Streetsboro, OH


5. 7253 Lake Juno Rd, Liberty, NC

Price: $599,000
Why it’s here: 
Become the baron of your own water park! The former 30-acre Lake Juno Park was once a popular swimming, camping, and entertainment destination.

For 48 years, this park attracted folks with its waterslides, campground, miniature golf, and paddleboard offerings. But buyer beware: The party building, electrical systems, and three-bedroom residence all “require major repairs” for termite, mold, and water damage.

Liberty, NC


4. 3419 Old Fluvanna Rd, Chautauqua, NY

Price: $475,000
Why it’s here: 
This seven-bedroom home comes with a surprising indoor pool.

We didn’t expect to find an aquatic feature inside a home that was built in 1928. The current owners renovated the charming 4,503-square-foot brick house, including updating the kitchen and bathrooms. It sits on an acre lot and offers pleasing views of Chautauqua Lake.

Chautauqua, NY


3. 9200 Bentley Park Cir, Orlando, FL

Price: $15,000,000
Why it’s here: 
We’ve seen the trend toward theme park residences in this part of Florida, and this enormous estate is just another example. It offers luxury for the adults while keeping the kids entertained. There’s a “Star Wars” bedroom area and a princess bedroom complete with a carriage.

Known as Bentley Hall, the seven-bedroom, 20,690-square-foot home is located just a few minutes from Walt Disney World. The estate is being offered fully furnished and comes with an indoor spa, sauna, steam room, gym, and home theater complete with a concession area and ice cream bar.

Orlando, FL


2. 1 Sargent Dr, Lockport, NY

Price: $1,200,000
Why it’s here: 
Holy time capsule! This ’70s-themed house in Niagara County even features carpet in the kitchen.

Not much has changed on the inside of this 8,095-square-foot home since it was built in 1967. The brick estate provides a throwback to more colorful times with its brightly colored carpets, parquet floors, and wood paneling. We wouldn’t touch a thing—except that kitchen carpet.

Lockport, NY


1. 355 Pelham Ln, Mooresville, NC

Price: $15,995,000
Why it’s here: 
This 140-acre equestrian estate is where NASCAR Driver Ricky Stenhouse Jr. races home after a weekend on the track.

The sprawling five-bedroom mansion features a dramatic two-story foyer with double staircases and gorgeous wrought-iron railings.

The home offers nearly 10,000 square feet of living space, and luxury details include exposed wood beam ceilings, an eye-popping curved kitchen, a glass-enclosed wine cellar, and a home theater.

Mooresville, NC


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Rental Prices Are Smashing Records—but a Big Change Appears To Be Looming

Rental Prices Are Smashing Records—But A Big Change Appears To Be Looming

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Rents continued their unprecedented surge upward in June—but there are signs that it won’t last forever.

The median rent across the 50 largest metros climbed 14.1% year over year, to a median of $1,876, setting the record for highest rent ever tallied by Realtor.com® for a 16th straight month.

While rents are unquestionably higher than they’ve ever been, the numbers indicate that we might be nearing an end of the era of extremely steep, rapid rent hikes, according to the report. (Metros include the main city and surrounding suburbs, small towns, and urban areas.)

While rents continued to shoot up, causing plenty of pain for tenants, the growth in prices is slowing down. June saw the lowest year-over-year growth in prices of the year. It’s also a shift from January when rents shot up 17.6% compared with a year earlier.

“There was a big shock that everybody felt,” says Joel Berner, senior economic research analyst at Realtor.com. “As things start to get back to normal in real life, things will start to get back to normal in the rental and [for sale] housing markets, too.”

That slowdown doesn’t feel the same in all metros. Sun Belt cities and suburbs are still seeing astronomical growth rates in rent year over year. Miami continues to lead the pack, with median rents growing by 37.4% compared with June of last year. Magic City renters paid a median of $2,850 a month for a roof over their heads. A few hours north, Orlando, FL, saw the second-highest year-over-year rent growth at 23.9%, for a median monthly rent of $1,979.

The expectation that rental prices won’t continue to spike forever is little comfort for renters. Median prices in the 50 largest metros grew by 27.6% since June 2019.

It’s still cheaper to rent than to buy in much of the nation

However, renters can find solace knowing that renting is still much more affordable than buying in the majority of U.S. cities, thanks to record-high sale prices.

It was still cheaper to pay landlords each month rather than a mortgage in 38 of the 50 largest metros in June, according to the Realtor.com report. Thanks to a hike in mortgage rates, on top of fast-rising home prices, purchasing property has become even more unaffordable. The mortgage rate increase made the monthly cost to buy starter homes in these metros $416 more per month than it would have been under last year’s rate.

“Renters who would be looking to buy are getting priced out of the market,” says Berner. “The difference between buying and renting is a lot more than it was a year ago.”

In booming markets like Austin, TX, the gap between the median rent and monthly cost to buy has ballooned. The difference between a hypothetical mortgage and rental of a similar-sized starter home increased to more than $1,800 per month.

Loca real estate agents see an equilibrium forming in the coming months as the mad dash of the past year comes to an end.

“Austin for the last 18 months has been madness,” explains Compass real estate agent Andrew Stanek. “What we’ve found is a ton of sellers got in a bad habit of being convinced they could list at any number they want. That’s why you’re seeing the price reductions” on listings.

Outside of Austin, other metros are expected to see prices fall back in line as well.

“The housing market’s starting to turn a corner where listing prices are going to start leveling off,” says Berner. “So we expect [rent and sale prices] to move together” more in tandem.

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Exclusive: The Stars of ‘Good Bones’ Open Up About Their Biggest Real Estate Regrets

Mina and Karen


Season 7 of “Good Bones” has arrived, starring Mina Starsiak Hawk and Karen Laine turning run-down fixer-uppers around Indianapolis into gorgeous new homes.

But renovating a house today is much tougher than ever, and Starsiak Hawk and her mother, Laine, have had their fair share of frustrations along the way. Curious to hear more about the highs and lows they’ve experienced lately, we had a chat with this duo about what fans can expect in Season 7 (including a cute new cast member) as well as their top tips for homebuyers, sellers, and owners today.

Is there anything new fans can expect to see in Season 7?

Karen Laine: There is one very exciting thing that you will see: I got a puppy! Adelle is the cutest thing ever, and she goes with me pretty much everywhere. So I’m assuming she’s going to show up in Season 7.

Mina Starsiak Hawk: The majority of this season was filmed in the thick of the [COVID-19] pandemic. So I can’t imagine that you aren’t going to take notice of some of the pandemic-related things that exacerbated problems, like supply issues. We were trying to reveal a house, and the house has been ready for about two weeks, and we don’t have concrete because we can’t get it anywhere!

So some of the homes took over a year to do. And this season particularly is unique because there’s usually about a year between when we do the house and when it airs. But because everything got so pushed, we’re still filming the back half of Season 7 while these are airing. So we’ve got some really quick turnarounds, and some homes were finished here two months ago and they’re getting ready to air, which has never happened before.

Laine: Viewers will see a lot of the same things that they’ve loved in the past—you know, lots of really wretched houses. We do have an epic garage this season, which is very exciting for us.

COVID-19 is still throwing a wrench in renovations. Do you have any advice for homeowners who want upgrades?

Laine: Doing construction in COVID is hard. Be patient. Just keep a grace because if you are undergoing a reno right now, you’re probably tearing your hair out because nothing’s getting done. And that’s just the landscape right now.

I don’t know how Mina’s doing it without violence because that’s what you’re moved to. It’s like, why? Why can’t I just have some windows or some concrete or some paint? Why can’t that happen? And the excuses are long and complex and true and frustrating. So just give everybody a little grace.

Mina and Karen
Karen Laine and Mina Starsiak Hawk on an episode of HGTV’s “Good Bones”


Do any renovation mistakes stand out that you regret making?

Starsiak Hawk: We’ve accidentally painted a house Packers colors. Huge mistake. The trim was, like, a yellow. The body of the house was that rich green. And I was like, ‘nope, this was a bad decision to begin with.’ So repainted that trim really quick.

Laine: The other painting error which I will never live down was the polka dot. Yeah, I just thought polka dots would be cute and whimsical and fun—and they weren’t. It wasn’t executed well. It wasn’t cute. It wasn’t whimsical. It wasn’t fun. We had to sand the wall and repaint it. But the nice thing is that paint design errors are easy to fix.

Starsiak Hawk: I really love pattern countertops. Mostly butcher block is how we’ve used them. It takes something simple—that nice, blond oak color—and they do them in a herringbone pattern. So it adds a little bit of texture.

Butcher block has been around for a long time, and so the herringbone, the chevron, the basket weave, gives it a new look. And it’s nice to be able to put that pattern in a different place other than the floors or tile.

Laine: The only trend that belongs in a home is what the homeowner loves. It’s not what designers are saying: ‘Oh, this is what’s hot this year.’ You know, Pantone comes out with their Color of the Year. That’s not your color? Don’t use it.

We don’t want to make a house trendy. I don’t think that’s what people are looking for, which is why even though I hate white kitchens and they seem to be a trend that comes and goes, so many people love a white kitchen. So it makes sense to have a white kitchen because she is trying to sell these houses.

Do you have any upgrades you’re hankering to do in your own homes?

Starsiak Hawk: I’ve only been in my house for three and a half years, and there are already things I want to update. I built up my laundry a little more, and I put some countertops and some shelving. And the nursery that was downstairs isn’t a nursery anymore. The only big regret I have in my house is I shrank our bedroom and bathroom to make the kitchen 2 feet bigger. And I want to redo my bathroom. I don’t know if I will because I don’t know if we have time.

Laine: What homeowners find when they move in to a space is, somewhere in their home, there’s a functionality they want but they don’t have. And frequently, it revolves around storage. And storage is such an easy problem to solve.

I put two rows of shelves on the ceiling. They will take up no floor space. Everything is out where I can see it. It’s where all my books were. And it’s a super easy solution. Shelves are not expensive and they are not hard to put up.

Another thing that you can do to change the feel of your space is paint. Or just changing out your curtains can make a space feel completely different. And all the textiles. I switched out a big-box store rug for a high-quality wool rug from a local vendor, and it changed the complexion of the entire room. Like, I live in a different house because of that rug.

And so there are lots of little things you can do. Repurposing a room so you have a room that was a bedroom, it can be anything. It doesn’t have to be a bedroom. You can make it a study. You can make it a workout room. You can make it a yoga room. You can make it your little painting room, your Zen retreat, whatever.

And so I think you just have to be a little creative and look at the space you have and say, “How can I use this in a way that works better for my life now?”

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America’s Best Place To Live Is Shockingly Affordable—and Offers a Few Fun Surprises for Free

America’s Best Place To Live Right Now Is Shockingly Affordable—and Offers a Few Fun Surprises for Free

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With home prices still skyrocketing (currently hovering at a national median of $450,000), everyone’s wondering whether there’s any halfway decent place where they can live that won’t break the bank—and a new report reveals some surprising areas to consider.

According to Livability’s annual list of the Top 100 Best Places to Live in the U.S. right now, the top spot is a bit of a shocker: Madison, WI.

The researchers at Livability came up with their rankings by sizing up 2,300 small and midsized cities (defined by populations of 500,000 or less), comparing 50 factors across eight different categories, including economics, housing, transportation, infrastructure, education, and health care.

The results celebrate “the amazing small and midsized communities across the U.S.—the ones who really shine when it comes to offering affordability alongside amenities and opportunity,” according to Livability’s editor, Amanda Ellis.

Why Madison was ranked the best place to live

While Madison might not immediately come to mind as an ideal place to settle down, this choice makes more sense when you consider how Americans prioritize affordability now more than ever.

“As remote work trends continue and affordability becomes more elusive amidst high inflation, people are thinking about where their money goes the farthest,” Ellis explains.

In Madison, the median home price hovers at $416,000, well below the national median. Plus, this city boasts a healthy roster of cultural events residents can attend for free—including a zoo, rooftop concerts, botanical gardens, and much more.

Meanwhile, outdoor enthusiasts can enjoy hundreds of miles of hiking and biking trails, plus two lakes surrounding the city perfect for canoeing and other water sports. It’s all gratis, provided you have the equipment!

In addition to Madison, the entire Midwest region was awarded with eight cities in the top 10.

One huge downside to these ‘livable’ cities

Yet some experts point to one huge oversight in these rankings: the weather.

“These Midwestern states see a lot of snow in the winter, whereas here in the Southeast, people are flocking to escape it,” says Damian Hall, a real estate agent with The Damian Hall Group in Greenville, SC.

Tony Mariotti, a real estate agent and founder of RubyHome in Los Angeles, agrees that snow and ice are important to many.

“If weather were a factor in their algorithm, it would have moved the rankings considerably,” he notes.

Still, if you don’t mind or even enjoy some snowy weather come winter, then these cities could be the bargain home shopping destination you’re looking for.

Here’s a rundown of Livability’s top 10 most livable cities, plus the median home price for that area. (Median listing prices are from Realtor.com® in June, including the metro level and surrounding areas.)

America’s top 10 places to live in 2022

  1. Madison, WI: $416,000
  2. Ann Arbor, MI: $449,888
  3. Rochester, MN: $379,900
  4. Naperville, IL: $365,000
  5. Overland Park, KS: $399,945 (based on nearby Kansas City, KS)
  6. Minneapolis, MN: $419,950
  7. Fishers, IN: $319,900 (based on nearby Indianapolis)
  8. Salt Lake City, UT: $632,000
  9. Pittsburgh, PA: $240,000
  10. Carmel, IN: $319,900 (based on nearby Indianapolis)

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On the House: Should First-Time Homebuyers Press the Pause Button?

On The House: Should First-Time Home Buyers Press The Pause Button?

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I’ve been hearing that the housing market is slowing down and prices may even start falling. Should I put my home search on hold to get a better deal down the road?

The news has been filled with stories about how the housing market is finally cooling—after more than two years of unprecedented price growth and wild bidding wars. More homes are going up for sale in many markets. Buyers no longer need to waive every contingency imaginable—and promise to name their first born after the seller—to snag a home of their own.

Some prospective buyers are starting to believe that falling prices might even be on the horizon if they just wait out this crazy market.

Is putting the home search on hold a money-saving move or just wishful thinking? That remains to be seen. No one wants to buy at the top of the market, but it’s not clear yet whether the market has peaked—or if record-high home prices and fast-rising mortgage interest rates will continue ratcheting up even further.

Now, as the nation appears to be on the precipice of what could be another recession, inflation is soaring, and financial markets are stuck in a mostly downward-moving roller-coaster ride, it seems like something has to give.

So is the time right to dive into homebuying, while you still can? Or should you go into a holding pattern? As it turns out, there are compelling arguments on each side.

Let’s break it down into what we know: There are more homes going up for sale. Sellers have raced to plant “For Sale” signs in their front yards while they can still fetch a good price and builders have put up more new residences. That’s great news for homebuyers.

The number of sellers forced to cut prices on their properties doubled in June compared with the same month a year ago.

We also know that there’s less competition from buyers. Fewer buyers are able to qualify for mortgages as a result of the higher interest rates. Others worried about high prices and the prospect of another recession are dropping out of the market. That means fewer bidding wars. Buyers don’t have to offer so much over the asking price—and might even be able to get a home for less than the asking price. And they don’t need to waive as many contingencies.

Still, many real estate experts are advising buyers—especially first-timers—to wait it out this period. Why? Because the toxic combo of high prices and rates has pushed homeownership out of financial reach for many younger or less well-off buyers, or would require them to dangerously stretch their budgets.

It’s likely that those who wait until the fall or next spring are likely to encounter even more homes for sale, additional price cuts, and an increasingly buyer-friendly market.

We also know that mortgage rates typically fall during recessions. So if a downturn does materialize, buyers who remain employed will likely get a little bit of a financial break.

Economists don’t expect widespread unemployment in a downturn that would lead to large numbers of homeowners not being able to pay their mortgages—as happened in the housing crash. Lenders haven’t made nearly as many risky loans. And there are still too many folks who want to become homeowners and not enough residences to go around.

So while prices might go flat, or even dip a little in certain parts of the country where they shot up the most, they’re not expected to fall significantly.

Why first-time homebuyers might not want to wait

While it’s true that what goes up must come down—there’s no telling just when that will be. It’s not easy to time the market.

Some real estate experts are predicting that home prices will just continue to rise. We know there are still far more investors and people out there who would like to become homeowners than there are properties available for them. That’s expected to keep prices high.

Mortgage rates are another unknown. Mounting recession fears could keep them in check. However, the U.S. Federal Reserve is likely to give its own interest rates another steep hike this month to rein in inflation, which stubbornly refuses to fall. When the Fed’s rates rise, mortgage rates typically follow suit.

Higher rates would make homeownership even more expensive than it is today. That could price many aspiring homeowners, especially those who don’t have the proceeds from the sale of a previous home to help finance the next purchase, right out of the market. Or first-time and other buyers might have to look at cheaper homes, such as fixer-uppers and smaller properties without all of the features they had hoped for in less desirable locations.

What’s a first-time homebuyer to do?

Most so-called experts will admit they don’t have the best track record of predicting what the economy or housing market will do. Few economists anticipated that home prices would surge more than 40% in just over two years during a global pandemic. Even fewer called the housing bubble of the mid-2000s that plunged the nation into a painful recession.

My best advice is to be vigilant about what’s happening in the housing market, as well as the broader economy. Look for clues on where it all might be heading. And don’t be afraid to negotiate with home sellers as well as mortgage lenders.

If rates fall one day, be ready to pounce immediately. Shop around for the best rates, consider paying points, which lower rates, and be prepared to haggle. You want to lock in the lowest rate you can find, yet maintain some flexibility so that if they fall even further, your lender will honor the lower rate.

The same goes for homebuying—be ready to move in on a good opportunity. Sellers are likely to be receiving fewer offers than they were just a few months ago. That means buyers might not have to offer as much over the asking price. They might not need to waive home inspections and might be able to negotiate repairs and other problems with the sellers. This can help to lower their total bills or even result in a smaller sale price. Buyers who hold on to their appraisal contingency also can save themselves some cash if the home isn’t valued as much as their initial offer. This gives them the opportunity to renegotiate a better price.

Buyers might also not need to put as much down for sellers to seriously consider their bids. This allows them to do the math and see if it makes more financial sense for them to put in a lower down payment and use the rest of the money to buy down their mortgage rates.

Watch the markets. Keep track of housing trends and economic factors. You’ll get a clearer idea of when the time is right for you.

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The Housing Market Is Correcting. So Why Are Home Prices Still Running Up That Hill?

The Housing Market Is Correcting. So Why Are Home Prices Still Running Up That Hill?

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Home prices have continued their seemingly inexorable rise, despite America’s housing market purportedly being in the throes of a correction, a slowdown—whatever you want to call it. It’s defying what many experts predicted and, just maybe, conventional wisdom.

Buyers can’t afford these higher prices on top of higher mortgage interest rates. Deals are falling through. Bidding wars are drying up. Six-figure offers over the asking price are going the way of the dinosaurs. So how is it possible that median home list prices were 15.9% higher in the week ending July 9 than they were a year ago, according to Realtor.com® data?

The disconnect appears to be that home sellers have yet to adjust to this new reality—the one where they can’t slap whatever price they’d like on their properties, sit back, and wait for the bidding wars to commence. Surging mortgage rates have made it impossible for many buyers to afford what they could have just a few months ago.

Meanwhile, record-high home prices are up more than 31% over the past two years, according to Realtor.com June list price data. And they keep rising. Something seems like it needs to give.

“Prices adjust really slowly,” says Realtor.com Chief Economist Danielle Hale. “Sellers are shaped by recent experiences. Before we see prices start coming down, we’re going to have to see sellers stop shooting for the moon.”

And just because sellers are asking for more money, it doesn’t mean they’re getting it. Buyers are negotiating. The number of price reductions on properties doubled in June compared with a year earlier.

Last month, about 11% of builders dropped prices on newly constructed homes, according to building consultancy Zonda. An additional 70% kept them flat compared with May.

“Real estate markets freeze when you see a big change in mortgage rates or the economy,” says Mark Zandi, chief economist at Moody’s Analytics. “Buyers cannot handle these house prices at these mortgage rates,” he says. “The mortgage payment is just too high for most first-time homebuyers. Trade-up buyers aren’t going to trade up because they’re going to have to get a higher mortgage rate.”

Home prices typically spike in the summer. Larger, more expensive homes go up for sale, and families eager to be settled before the kids start school in the fall compete for them. Plus, there are scores of millennials who are reaching the point in their lives when the idea of homeownership becomes more appealing. But now there still aren’t nearly enough homes for sale, or rent, to go around.

Record-low mortgage rates, which fell into the 2% range last year, allowed buyers to afford higher home prices. The lower rates meant that many monthly mortgage payments remained reasonable, balancing out the extra buyers spent on their properties.

However, mortgage rates have spiked from just about 3% a year ago to the mid-5% range. That’s tacked hundreds of dollars a month onto many mortgage payments. Buyers today are faced with mortgage bills 58% higher than they were just one year ago—when prices were also at record highs—on top of higher inflation, rents, and gas prices. That’s rendered many unable to borrow nearly as much for a home anymore and forced many others out of the market.

“A lot of homeowners are still pricing homes based on the market of six months ago,” says George Ratiu, manager of economic research for Realtor.com. “There is a gap between what homeowners are asking and what they’re getting.”

Will home prices fall?

The top question on the minds of homebuyers and sellers alike is whether home prices are going to fall—and if so, by how much.

Many real estate experts anticipate the rate of price growth will slow down as the year goes on. Others predict prices will flatten out as sellers and builders digest the new state of the market and buyers figure out their finances.

“It takes a little time for the wheel to turn,” notes Devyn Bachman, senior vice president of research at John Burns Real Estate Consulting.

Ultimately, exactly what happens to prices will depend largely on individual real estate markets as well as the price ranges the homes are in. Places where prices rose the most during the COVID-19 pandemic are the most likely to come down and have the potential to decrease the most.

These places, such as Austin, TX, Phoenix, and Boise, ID, got juiced by an influx of remote workers and investors who kept prices above what many locals could afford. Now that fewer telecommuters are moving in and with mortgage rates making purchases even more difficult, prices might readjust.

But prices could continue to rise, at least by low single digits, in other parts of the country.

“Housing is so local that it’s hard to paint with a broad brush and say prices will decline. But if you look at the individual ZIP codes as well as certain metros, we will see pricing declines in some of them,” says Bachman. “Home values are no longer realistic for today’s buyers. They can’t afford them.”

A recession is the wild card in the future of home prices

The wild card in all of this is a recession. If there’s an economic downturn, then home prices (as well as mortgage rates) are more likely to adjust. Potential buyers who are laid off or are worried about losing their jobs, probably aren’t going to be attending open houses and putting in offers.

However, home prices aren’t expected to drop off a cliff the way they did during the Great Recession.

The reason: The number of investors and aspiring homeowners right now far exceeds the number of properties for sale. Builders have struggled to ramp construction back up since the mid-2000s, and investors have bought many of the properties that used to house homeowners and turned them into rentals. That demand is expected to keep prices high.

“The market is very tight. That will put a proverbial floor under prices,” says Zandi.

Meanwhile, an influx of foreclosures and short sales like what the housing market experienced in the Great Recession doesn’t appear on the horizon. Lenders have become much choosier when doling out mortgages to ensure only the most qualified applicants receive them. Most predatory mortgages have been eliminated. This leaves homeowners in a much better place to weather another downturn.

“To get big declines in prices, you need to see a lot of foreclosure and distressed sales at big discounted prices,” says Moody’s Zandi. “That’s very unlikely because mortgage lenders have been very cautious since the crisis, and they’ve only [mainly] been making plain vanilla 30-year and 15-year fixed-rate loans.”

He anticipates a downturn could push prices down 5% across the board and much more so in overheated markets.

And, in a boon for buyers, mortgage rates typically fall when the economy is hurting. That can “cushion the blow” for many folks struggling to afford real estate, says Zandi.

The housing correction is fewer sales, more available homes

While the housing correction might not yet be showing up in prices, it’s apparent in the fast-falling number of homes changing hands.

There were about 6.1 million home sales a month in 2021, according to the National Association of Realtors® data. (This doesn’t include sales of newly constructed homes.) In May, the latest month of data available, that fell to about 5.4 million sales a month. That’s a substantial change.

“Home sales have slowed pretty notably. They’re back below their pre-pandemic pace,” says Hale, of Realtor.com. “The housing market is not as hot as it was last year. But compared to any pre-pandemic year, it’s still a pretty hot real estate market.”

One of the side effects of fewer sales is an increase in the inventory of homes on the market, helping to ease the housing shortage. There were 18.7% more homes for sale in June than there were a year ago.

While there aren’t nearly enough properties on the market to ease the housing crunch, more homes for sale is “a reason for buyers to get optimistic,” says Hale.

The post The Housing Market Is Correcting. So Why Are Home Prices Still Running Up That Hill? appeared first on Real Estate News & Insights | realtor.com®.

I’m the Chief Economist at Realtor.com. These Are the 4 Things You Need To Know About the Housing Market Now


If you feel a bit of whiplash hearing the varying takes on the housing market right now, you’re not alone. Home prices are still rising—but not as much! Mortgage rates are generally up—but recently they’ve held below 6%! (See the lowest mortgage rates you can get now here.) There are bidding wars galore—but not everywhere! That’s why MarketWatch Picks created a series where we ask prominent economists and real estate pros their take on the housing market now.

This week, we talk to Danielle Hale, who has been the chief economist at Realtor.com for the last five years. She’s responsible for developing and translating real estate trend data into consumer and industry insights. Before that, she worked as an economist at the National Association of Realtors (NAR) for nearly a decade. We asked her to share five things she thinks home buyers should know, given the current real estate market. (Realtor.com is owned by the same parent company as MarketWatch.)

‘Housing inventory has made the biggest about-face ever,’ but we’re still short on homes

Even though housing inventory has improved since last year, there’s still a shortage of options for home shoppers in today’s market, relative to what was normal before the pandemic.

“Our June Housing Trends Report shows that housing inventory has made the biggest about-face ever in a one year period of time, rising 18.7% over this time last year,” says Hale.

1 in 7 homes on the market has now gotten a price cut

Hale says home prices are still growing at a faster than normal pace, but price reductions among sellers are more common this year than last year, even as they lag pre-pandemic levels.

“Roughly 1 in 7 homes in June had a price reduction, up from roughly 1 in 13 in June 2021, but still below the 1 out of every 4 to 5 that was typical in 2017 through 2019. In short, the national market is resetting and the local area where you’re trying to buy may be on the leading or lagging edge of these trends,” says Hale. See the lowest mortgage rates you can get now here.

Pay attention to local conditions

“The local area where you’re trying to buy could be more or less buyer-friendly than the national data indicates,” says Hale. Hale says potential homebuyers should follow the data to know what’s going on in the housing market and may want to work with a real estate agent or pro to help them find the right home.

“That will help them set more realistic expectations and keep up with trends that are evolving, in some respects in a more favorable direction for buyers,” says Hale.

Make sure you’re financially ready to buy

With the housing market poised for a reset and economic uncertainty ahead, it’s more important than ever to make sure you’re financially ready when making a home purchase.

“Before you start shopping, take a hard look at your budget and figure out that you’re comfortable spending on housing each month. Mortgage calculators and lenders will advise you based on financial rules of thumb that suggest you should spend no more than 28% of your income on housing payments and no more than 36% to 50% on total debt payments, including housing, student loans and car loans,” says Hale.

Remember, these are just general rules and your personal situation may mean you can afford more or less than is typical.

The post I’m the Chief Economist at Realtor.com. These Are the 4 Things You Need To Know About the Housing Market Now appeared first on Real Estate News & Insights | realtor.com®.

Exclusive: Who’s Buying Up America’s Homes? New Survey Reveals Where They’re From

Guess Who’s Buying Up America’s Homes? New Survey Reveals Where They're From

Realtor.com / Getty Images

Home prices in the U.S. are so sky-high these days, even wealthy foreign buyers aren’t immune to feeling the pinch.

Last year, international buyers snapped up 98,600 residential properties totaling $59 billion, according to a new National Association of Realtors® survey of about 9,400 Realtors conducted from April 11, 2021, through May 9, 2022.

Granted, these foreign purchases account for a slim fraction (just 1.6%) of the 6.06 million total existing-home sales in their data’s time frame. In fact, international buyers made 7.9% fewer property purchases than they did a year earlier. Nonetheless, record-high home prices led them to spend 8.5% more for the privilege of owning property on U.S. soil. (Only existing homes, not new construction, are considered in the data.)

And while $59 billion is undoubtedly a massive infusion of cash into the housing market, it’s a steep fall from 2017. That year, foreign buyers bought a record $153 billion worth of residential real estate in the U.S.

Why foreign homebuyers face a hard road today

Part of the problem is the COVID-19 pandemic, of course. While the U.S. travel ban expired in November 2021, vaccination, testing, and quarantine requirements remained in place in many overseas lands, preventing easy travel around the globe.

“For the second year in a row, restrictions and general caution tied to international travel during the pandemic slowed homebuying by wealthier foreign buyers,” says NAR’s chief economist, Lawrence Yun.

(International buyers are defined in this survey as non-U.S. citizens with permanent residences outside the U.S., recent immigrants who have lived in the U.S. less than two years at the time of the real estate transaction, or non-immigrant visa holders who’ve lived in the U.S. for professional, educational, or other reasons.)

Pandemic aside, several financial factors likely made foreign buyers think twice about planting their money in property in the U.S.

“With the parity of the euro and the dollar, it has become much more expensive for Europeans to enter the U.S. market,” says luxury real estate broker Dolly Lenz, CEO of Dolly Lenz Real Estate, which serves clients all over the country. (While the euro was equal to $1.60 in the past, today, the two currencies are almost equal.)

In addition to regular currency fluctuations, cryptocurrency took a nosedive this year, shedding 70% of its value since its November 2021 peak. International homebuyers often use crypto to buy homes since this currency allows its owners to quickly move assets from international banks and exchanges to secure U.S. investments. But as crypto prices fell, so did the number of crypto homebuyers.

“International crypto buyers who were poised to make a big splash last year in the U.S. have all but disappeared,” says Jenny Lenz, managing director of Dolly Lenz Real Estate.

At the same time that foreign buyers might be feeling less flush, home prices in the U.S. have skyrocketed, placing properties out of reach from all but the wealthiest clients.

“Affordability challenges—along with the inability to find the right property—were the top reasons given for prospective international buyers who showed interest but ultimately did not purchase a home in the United States,” says Yun.

In fact, foreign buyers who did make offers on U.S. soil spent more on each home than ever before, coughing up a median of $366,100—the highest ever recorded by NAR. And nearly half of these real estate deals (44%) were paid in all cash.

Yet despite the pandemic, an overheated real estate market, and currency fluctuations, “we have noticed an uptick in foreign buyers who are coming back to the U.S. for the first time since the beginning of the pandemic,” says Dolly Lenz. “Deals are being made regularly with international clients, which wasn’t the case a year ago.”

Plus, rather than keeping their U.S. home as an occasional crash pad, more than half of foreign home shoppers bought homes in the U.S. to serve as their primary residences.

Where are international buyers getting homes?

Foreign buyers continue to favor Florida. The Sunshine State’s main home shoppers were from Latin America (39%) and Canada (25%), likely drawn to Florida’s beach-friendly climate and lack of state income tax.

California claimed second place, with 11% of the foreign buyer share. The Golden State was the top destination among Chinese and Asian/Indian buyers. However, that figure still is 5% lower than in the prior period. Chalk the slump in Chinese buyers up to the slow travel recovery from Asia and Oceania.

And in third place among the most desirable locations for international buyers is Texas. The Lone Star State was popular with Mexican and Colombian buyers.

The top three areas were followed by Arizona (7% share), with nearly half of the buyers hailing from Canada.

Chinese buyers favored New York and North Carolina, with both states tying for 4% of the total foreign buyers. (New Jersey, Illinois, South Carolina, and Virginia also made the list.)

What types of homes are foreign home shoppers buying?

International buyers tended to focus on larger, more established real estate markets.

“Unlike U.S. buyers, who were receptive to trying out new or up-and-coming markets, the international clients are focused solely on trophy properties in prime locations,” says Jenny Lenz. “Think Central Park–adjacent in New York City, prime Beverly Hills, Malibu, waterfront Miami/Palm Beach, and other five-star locations.”

Indeed, slightly less than half of foreign buyers purchased a vacation home, rental property, or both.

Almost half of the overseas buyers preferred quiet suburban areas, with the majority (74%) purchasing detached single-family homes and townhomes. And while 10% of foreign buyers dropped $1 million on a property, not all are looking for a luxury pad.

Which foreign buyers are spending the most?

Chinese buyers spent the most on U.S. properties, dropping $6.1 billion in total. They were followed by Canadians, who collectively paid $5.5 billion. Buyers from India followed at $3.6 billion. Then came Mexican buyers, at $2.9 billion, and Brazilians, at $1.6 billion.

However, what they do in the future remains to be seen. Rising mortgage rates, inflation, currency exchange rates, what happens in the financial markets, and the trajectory of the pandemic will likely weigh on their real estate decisions.

“Foreign buyers … are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates,” says Yun. “In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”

So while the number of homes international buyers plucked from the available marketplace did not add up to much over the past 12 months, the next year might look quite different.

The post Exclusive: Who’s Buying Up America’s Homes? New Survey Reveals Where They’re From appeared first on Real Estate News & Insights | realtor.com®.

The 10 Most Affordable Lake Towns in America, 2022 Edition

The 10 Most Affordable Lake Towns in America, 2022 Edition

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They say a rainy day on the lake is better than a sunny day in the city. And with the cool waterfront breezes, fishing and kayaking on demand, early evening tequila on the dock, and a generally life-affirming vibe beckoning, who are we to argue with that logic?

Each year, with the arrival of the dog days of summer, the desire to find a place by the water becomes nothing less than a national obsession. The past few years of the COVID-19 pandemic brought hordes of well-heeled buyers into vacation destinations, bidding up prices and purchasing any and all available real estate.

But this year looks a bit different. With pandemic restrictions easing up—and American life returning to something akin to “normal”—locking in a home on the water is feeling like less of an imperative to some would-be buyers. And with inflation rising, stock and cryptocurrency markets taking a beating, and fears of another recession mounting, plenty of well-off Americans are holding off on buying yet another home.

And that is providing an opening for regular folks with steady jobs who have been saving up for just this opportunity to swoop in.

Even in today’s expensive real estate market, there are still a few places left where homebuyers can find great, affordable lake homes that can serve as Zen-inducing or pulse-pounding retreats (your choice!) for much of the year. And yes, they can be terrific investments, too.

“There has been a steady uptick in the number of people seeking out homes in lake towns over the past few years,” says Glenn S. Phillips, CEO of Lake Homes Realty. The company, based in Hoover, AL, has lakefront listings in 34 states.

“We see a trend across all our markets of buyers thinking, ‘Life is short, buy the lake home!’ Many of those seek out the more rural lake towns where homes may be relatively more affordable than at larger lakes or at lakes near cities,” says Phillips.

These lake towns might not be ones with the highest name recognition or bragging rights, but they do offer a host of fun water activities—and the privacy and small-town feel missing from bigger, more populated vacation spots.

To come up with our list of the nation’s most affordable lake towns, we looked at more than 11,000 towns with or on lakes. Then we calculated affordability by analyzing median home list prices year to date through May 2022 for these communities. Each place had to have at least 25 listings. We also factored in the number of restaurants, bars, and entertainment establishments per capita to ensure there was more to do in these places than just lounge by the water.

To ensure geographic diversity, we limited our list to just one city per state.

So, come on in, the water’s fine!


1. Sulphur, OK

The Little Niagara falls in Chickasaw National Recreation Area in Sulphur, OK.

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Median home list price: $224,000*

With a name like Sulphur, it’s no surprise that the area is famous for its mineral springs. With the Chickasaw National Recreation Area, the Lake of the Arbuckles, and the Artesian Hotel, Casino, and Spa, the small town has a lot to offer.

“With the campsites, the natural spring water, the scenic views around the park, and the lake, it’s just so calming and relaxing,” says Misty Treptow, executive director of the Sulphur Chamber of Commerce.

For outdoor enthusiasts, Chickasaw National Recreation Area (Oklahoma’s oldest national park) offers nearly 10,000 acres of camping, hiking, horseback riding, and biking.

The word is getting out. Treptow notes that the town has seen an uptick in the number of visitors to the area, as well as folks who have decided to turn their lake homes into their permanent homes.

“If they already had one home by the lake and they had another home in an expensive city and you had to consolidate, which are you going to choose?” she says

Those interested in a vacation getaway can snag this four-bedroom, 2.5-bathroom house located about 1.4 miles from the Guy Sandy boat ramp on Arbuckle Lake for $275,000. The roughly 2,000-square-foot house sits on a third of an acre and has a fenced backyard.

2. Spirit Lake, IA

A home for sale in Spirit Lake, IA.


Median home list price: $301,000

Located just south of the Iowa-Minnesota border, Spirit Lake sits on the western shore of East Okoboji Lake, in the Iowa Great Lakes region. The region boasts seven lakes, with the three largest natural bodies of water located in the town proper: Big Spirit Lake, West Okoboji Lake, and East Okoboji Lake. That provides plenty of opportunities for swimming, fishing, boating, and even hiking. (Fun fact: Big Spirit Lake is home to 40 different species of fish.)

The small town, which made our 2020 and 2019 lists, offers something for everyone, from nature lovers to history buffs and foodies to golfers.

It’s also a prized destination for great shopping and local activities—like a top-notch weekly farmers market—and its welcoming community vibe, says Jen Schaben, real estate agent with Stauss Realty in Okoboji.

Spirit Lake also offers a host of museums and local historical sites such as the Dickinson County Heritage Center and the Iowa Great Lakes Maritime Museum. For car buffs, the Okoboji Classic Cars Museum is a must-see.

There has been a lot of new development in the area, as more people from out of state discover the Spirit Lake area, says Schaben. California, Omaha, and Minnesota are among the most popular transplant states.

As for housing, there is something for any price range.

“It just depends on what you’re looking for,” Schaben says. “We have homes that are $100,000 to $250,000, and then we also have $5 million lake homes. There is a wide variety in a very small town.”

For those looking for an affordable lake home, this three-bedroom, three-bathroom ranch is listed for $375,000. It sits on 1.5 acres across from Templar State Park on Big Spirit Lake.

3. Watertown, SD

Watertown is tucked between Pelican Lake and Lake Kampeska and offers a plethora of water sports like canoeing and water skiing.

Photo courtesy of visitwatertownsd.com

Median home list price: $315,000

Those lucky enough to see a sunset at Lake Kampeska could understand how wildlife artist Terry Redlin was inspired by his surroundings in Watertown.

The bucolic town, tucked between Pelican Lake and Lake Kampeska, offers a plethora of water sports like canoeing and water skiing. In addition to lakeside living, residents also take advantage of the prime fishing, picnic, and camping spots, and a scenic paved trail for bikes and pedestrians that winds through the town and around Lake Kampeska.

“We have four seasons here, and most people like that it switches things up from boating, to snowmobiling, ice fishing, and hunting—the list goes on,” says Jayson Maguire, Realtor and owner of Exit Realty Connection in Watertown.

Maguire says there has been an increase in interest in the area, especially from out-of-state buyers given the area’s lakeside location and tranquil and safe community.

Buyers can find homes like this three-bedroom, two-bathroom lakeside abode, listed for $449,000. The house, which sits on nearly a quarter-acre, offers views of Lake Kampeska from the deck.

4. Winsted, CT

A home for sale in Winsted, CT.


Median home list price: $260,000

Nestled into the scenic foothills of the Berkshire Mountains, this picturesque community is home to Highland Lake, one of the largest lakes in Connecticut and a popular spot for residents to beat the summer heat.

The 440-acre, 3-mile-long lake features two public beaches and a shoreline dotted with a mix of upscale and affordable permanent and vacation homes. The lake’s crystal-clear waters are the ideal spot for fishing, water-skiing, and swimming.

The village of Winsted offers a downtown filled with antiques stores, restaurants, and small boutiques for those hoping to wile away a lazy afternoon.

Vacation homes are still affordable in Winsted. This two-bedroom condo on Highland Lake, with a shared dock across the street, is for sale for $319,000.

5. Ketchikan, AK

Ketchikan is known as the “Salmon Capital of the World”.

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Median home list price: $420,000

Alaska might not be the first place most folks think of when they envision summer lake towns. However, the “Salmon Capital of the World,” as Ketchikan is known, is built up along the waterfront due to its steep and mostly forested terrain. The city sits in a strategic position at the southern tip of the Inside Passage, connecting the Gulf of Alaska to the Puget Sound.

Aside from focusing on the world’s largest collection of standing totem poles, amateur photographers can point their cameras in nearly any direction and capture a gorgeous view of the city’s jaw-dropping natural beauty. There is a thriving and vibrant art and cultural scene that highlights the area’s Alaskan native heritage.

Buyers on a budget, who don’t mind roughing it a bit, can check out this small cabin on Pennock Island for just $79,000.

6. Lake Placid, NY

Lake Placid is one of the most sought-after vacation spots in New York.

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Median home list price: $279,000

Here is a lake town that visitors and residents can enjoy throughout all four seasons. With world-class skiing nearby, Lake Placid hosted both the 1932 and 1980 Winter Olympics.

Located in the Adirondack Mountains and surrounded by rivers famous for fly-fishing, cliffs made for climbing (and jumping), and lakes ideal for a host of water sports, Lake Placid is one of the most sought-after vacation spots in New York.

The quaint village offers restaurants, hotels, resorts, and fun and unique shops along its cute downtown corridor. There is also an active and vibrant local arts scene thanks to the Lake Placid Center for the Arts.

Striking views, a gorgeous landscape, stunning lakes, and affordable housing? Yup.

In fact, for $250,000, homebuyers can buy their own patch of Lake Placid and build their dream home. The 0.67-acre lot is one of the last waterfront building sites in the village of Lake Placid and comes with 295 feet of sandy waterfront. The 1,500-square-foot footprint allows for a second story, allowing the buyer to build a stunning 3,000-square-foot home on the water.

7. Sandusky, OH

A home for sale in Sandusky, OH.


Median home list price: $158,000

Located on the sandy shores of Lake Erie, Sandusky was named one of America’s best coastal towns by U.S. Today, and topped the Realtor.com 2021 list of the Most Affordable Lake Towns.

Even though it has dropped a couple of spots, Sandusky remains a popular vacation spot for Midwesterners looking for lake living at affordable prices.

Once an old port town, Sandusky is now known as a major recreation and entertainment destination. Visitors can easily hop on a ferry for a day of island-hopping, or spend the day at Cedar Point Amusement Park, which bills itself as the “Roller Coaster Capital of the World.” They can also take a trip to the Merry-Go-Round Museum.

For those looking for a property as close to the water as possible, there are options. For the price-conscious, there is a two-bedroom, two-bathroom condo on Shoreline Drive that is listed for $260,000.

If the sky’s the limit, buyers can check out a four-bedroom, 4.5-bathroom mansion on Cedar Point Road listed for roughly $2.4 million. The unique 1.88-acre, lake-to-bay lot offers views from every window in the 8,800-square-foot home.

8. Ashland, WI

The Ashland Marina on the South Shore of Lake Superior, WI.

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Median home list price: $146,000

Tucked into Chequamegon Bay on the south shore of Lake Superior, Ashland is rich with local history, arts and culture, and natural beauty. There’s also the noteworthy shops and restaurants located in the town’s eight-block business district, which happens to be listed on the National Register of Historic Places.

In between shopping, don’t miss the reason Ashland is called the “Historic Mural Capital of Wisconsin.” Roughly two dozen murals dot the downtown district, depicting the lively history of the former logging town.

It’s easy to spend an entire day outdoors in Ashland, either fishing in the deep waters of Chequamegon Bay, hiking to one of the many nearby waterfalls, or simply counting the different species of birds flying over the bay.

Howebuyers can settle right into this three-bedroom, one-bathroom home just blocks from Lake Superior. Listed at $129,900, this house is close to the lake walk and Ashland’s vibrant downtown.

9. Cheboygan, MI

The historic Cheboygan Lighthouse on the shores of Lake Huron in the downtown waterfront district of Cheboygan, MI.

Getty Images

Median home list price: $248,000

Located at the mouth of the Cheboygan River on Lake Huron, the town offers clear waters and a gorgeous shoreline. There are several nearby lakes: Burt Lake, Long Lake, Mullett Lake, Twin Lakes, and Black Lake. After a full day of work, many residents find themselves on the water or hitting the trails for a hike.

“One of the best things is that we’re far enough from any major metropolitan area that our lakes are not that busy relative to their size,” says Deborah Fullford, a real estate agent with Coldwell Banker Schmidt Realtors of Indian River.

The former industrial town has pivoted and is cultivating its reputation as a resort town, Fullford says.

People are moving back to the area, either after retirement or because they can work from their lake cottage, she says.

Those looking to move to Cheboygan are finding plenty of affordable homes for sale, including this four-bedroom, 2.5-bathroom house listed for $169,900.

10. Lake Ariel, PA

A home for sale in Lake Ariel, PA.

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Median home list price: $307,000

Known as a major vacation destination, Lake Ariel is surrounded by the gently rolling hills of the Poconos Mountains. The area surrounding the lake is made up of mostly private homes, but there are several marinas where visitors can rent or launch a boat onto the lake’s clear waters.

For more water activities, locals also visit nearby Lake Henry and Lake Wallenpaupack, both recognized as prime fishing spots.

With a population of roughly 14,500, Lake Ariel is among the quieter, more peaceful lake towns. A majority of the population is seasonal.

Buyers might want to check out the Hideout, a planned residential community with 3,200 single-family homes nestled into the Poconos. The community is home to several private bodies of water: Roamingwood Lake, Deerfield Lake, Brooks Lake, Windermere Lake, Hidden Lake, and Big Springs Pond. The community is well-known for its abundance of vacation rentals and homes for sale.

Even in the gated community, affordable homes can still be found. This five-bedroom, two-bedroom house is listed for $325,000. Situated on nearly a half-acre, this house features a screened porch and is within walking distance of Roamingwood Lake.

* The average of monthly, median list prices for all homes in the city (not just lake houses) from January 2022 through May 2022, using Realtor.com data

The post The 10 Most Affordable Lake Towns in America, 2022 Edition appeared first on Real Estate News & Insights | realtor.com®.