If you’ve been paying attention even a little bit lately, you know the real estate market has been a hot topic. From inventory lows, to the mortgage rate roller coaster, to home prices peaking higher than your middle school fauxhawk, it can feel impossible to find a good buy in 2022.
But there are still markets you can break into that won’t break the bank. Whether you want to move to a more affordable city or you’re looking to buy an investment property, we found the best places for you to start your search.
Where to Buy for the Best Cost of Living
First things first: To find places with the cheapest cost of living, we looked at the Cost of Living Index published by the Council for Community and Economic Research (C2ER). This index compares expenses like housing, groceries, utilities, transportation, health care, and miscellaneous goods and services in every state. Sound good? Here we go.
1. Brandon, Mississippi
Mississippi is the cheapest state to live in in the United States. Its cost of living is 16.7% lower than the national average, and median housing prices sit at just $244,500—way lower than the national median of $404,950. Brandon, an up-and-coming city just east of the state capital, is catching the eye of those looking to move because of its job growth and new infrastructure.
2. Calhoun County, Alabama
Alabama is the state with the third-lowest cost of living—about 12.1% cheaper than other states on average. Even the most expensive city in the state, Birmingham, is still 6% below average. But the most affordable place to move to in good ol’ Alabama is Calhoun County—18% under the national cost of living average.
3. Muskogee, Oklahoma
Out west, Oklahoma ties with Alabama for an average cost of living that’s 12.1% lower than the national average. Oklahoma’s cheapest city is Muskogee. Move there, and you can enjoy a cost of living that’s a whopping 21% below average!
4. Knoxville, Tennessee
Cost of living in Tennessee is 11.3% below average. Nashville is the most expensive place to live in the state, but it still costs 5% less than the average U.S. city. However, if you’re looking to buy, head over to Knoxville, where the cost of living is about 20% lower than average.
5. Kalamazoo, Michigan
On our list, Michigan has the cheapest groceries (shout-out to Meijer) and the cheapest city to live in—Kalamazoo. In Kalamazoo, the cost of living is 24% below normal. I mean, take a (Michi)gander at that number. And with that, I’ve hit my dad joke quota for the day.
6. Morgantown, West Virginia
West Virginia’s cost of living index looks at one city—Morgantown. The cost of living In Morgantown is 9.5% below average, and it has the cheapest utilities and lowest median housing prices on the list.
7. Richmond, Indiana
Indiana’s cost of living is 9.4% less than the U.S. average. But in the fine city of Richmond, that number drops to 18% below average. However, head over to Bloomington—home to Indiana University, a top 100 school—and residents pay about 2% above average. Sheesh.
Where to Buy to Invest
Now that we’ve looked at where you’ll want to consider buying if you’re looking to move somewhere cheaper, let’s show some love to all you real estate investing hopefuls out there. (Check out more on why you should only invest local and once you’ve reached a certain financial milestone here.) To find the cities where you should consider buying real estate, we checked out what the National Association of Realtors® (NAR) had to say about undervalued markets.
Yeah, I know an “undervalued market” doesn’t sound like a hot spot, but here’s how the NAR defines it: A market is undervalued if the median home price to median family income ratio is lower among a distribution of metro areas. This distribution is determined by factors that drive supply and demand—things like job growth, population growth, the percentage of houses with Wi-Fi, the percentage of people between ages 25 and 44, and more. These factors basically imply that a market should see strong price appreciation (aka a big increase in prices) in 2022—making it a prime place to invest.
So, according to the “2022 Housing Market Hidden Gems” study by the NAR, here are seven markets to invest in thanks to price appreciation. (Interesting note: These markets are almost all in south—ain’t that something?)
1. Dallas-Fort Worth, Texas
Dallas-Fort Worth’s home value-to-income ratio is lower compared to the rest of the country. Among top undervalued markets, DFW (as the locals call it) has the largest percentage of the population between ages 25 and 44, a main indicator for future price appreciation.
2. Huntsville, Alabama
Huntsville is becoming one of the most sought-after places to live in the south. I know, I’m as shocked as you are. Strong job growth, population growth and good infrastructure should boost housing demand and home prices in 2022.
3. Fayetteville, Arkansas
Compared to other undervalued cities, the Fayetteville metro area saw the second-highest population growth at 6.3% from 2017 to 2020 (tied with Spartanburg, South Carolina, which I mention later). Home prices and average weekly wages also grew about 20%—meaning home demand and home prices are likely to grow too. As the Razorbacks fans (especially my wife, a former Razorback) say, Woo pig!
4. Melbourne, Florida
The Melbourne area population is somewhat older (looking at you, snowbirds), and in this case, that’s a good sign. Incoming retirees are expected to increase the housing demand and home prices this year.
5. San Antonio, Texas
San Antonio’s median home value of $227,684 is the second-lowest among undervalued markets—and it’s cheaper than other Texas metros like Dallas, Houston and Austin (which has an average of over $400,000!).
6. Spartanburg, South Carolina
Right in between Charlotte and Greenville is this hidden gem. Spartanburg’s estimated median home value in 2021 was $181,571 (which looks a lot more like home prices circa 1998). Jobs and population have also seen growth in recent years, giving Spartanburg a bright future.
7. Tucson, Arizona
Due to strong population growth and domestic migration, home prices in Tucson rose 23.6% between 2018 and 2021, surpassing wage increases, which were at 15.6%. I mean, talk about equity! The Beatles once sang about Jo Jo leaving his home in Tucson, Arizona, but he might want to reconsider in a market like this one.
Should You Buy Real Estate in 2022?
I’m going to give you a resounding maybe. Really, the answer depends on your situation—especially since every city has pros and cons.
The truth is, buying real estate only based on the cost of living or based on what home values are doing in a given area is a bad idea. You’ve got to consider things like whether you can earn a good living in the city, whether you’ll even like it, whether you’re financially at a place where buying a home makes sense, and whether it makes sense for you to take a financial risk at this point in your life.
After you consider those factors, you’ll have a clearer idea about where and if you should buy. But my best piece of advice? Talk to a local real estate expert in the location where you’re interested in buying, like a RamseyTrusted real estate agent. You can find RamseyTrusted agents nationwide, and I love them because I know they’re top-notch pros committed to serving me first. Happy real estating!
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.