Key Takeaways
- Several Midwest cities, including Grand Rapids and Des Moines, outperform national averages in under-35 homeownership, offering relative affordability.
- Under-35 ownership rates above 20% in select metros contrast sharply with sub-10% rates in high-cost coastal areas.
- Regional economic drivers—such as healthcare, insurance, logistics, and aviation—support job stability and entry-level home affordability.
- Midwest property markets may offer investment appeal, with lower price-to-income ratios and anticipated steady appreciation.
- Constraints such as elevated interest rates and limited housing supply could temper growth if not addressed strategically.
Midwest cities are emerging as unexpected bastions of affordability for young homebuyers, with homeownership rates among those under 35 significantly outpacing national averages in several metros. This trend, driven by lower housing costs and stable economic conditions, signals potential investment opportunities in regional real estate markets amid broader U.S. affordability crises.
The Midwest’s Affordability Edge
In a housing landscape where national homeownership rates for Americans under 35 have dipped to 36.4% in the second quarter of 2025, according to U.S. Census Bureau data, certain Midwest locales are defying the downturn. Cities like Grand Rapids, Michigan, and Des Moines, Iowa, boast rates above 20% and 19% respectively for this demographic, highlighting a regional resilience that could reshape investor perceptions of undervalued markets.
Grand Rapids leads with a 21.1% homeownership rate among under-35s, per recent Fortune analysis, buoyed by median home prices around 30% below coastal averages. This affordability stems from a combination of steady job growth in manufacturing and healthcare sectors, coupled with housing stock that hasn’t faced the speculative bubbles seen in Sun Belt hotspots. Similarly, Des Moines registers 19.8%, where a vibrant tech and insurance ecosystem attracts young professionals without the prohibitive entry barriers of larger urban centres.
Omaha, Nebraska, follows closely at 18.2%, benefiting from its role as a logistics hub with companies like Union Pacific anchoring employment. Wichita, Kansas, at 18.4%, leverages its aviation industry, while Cincinnati, Ohio (17%), and Minneapolis, Minnesota (16.5%), draw on diversified economies in consumer goods and finance. Even Akron, Ohio, at 14.2%, outperforms many national peers, thanks to its proximity to Cleveland’s rebounding market.
These figures contrast sharply with coastal metros, where under-35 ownership often languishes below 10% due to median prices exceeding $500,000. Newsweek reports that seven of the top 10 U.S. metros for young homeowners are in the Midwest, underscoring a migration pattern where Gen Z and millennials seek value amid rising interest rates and inventory shortages elsewhere.
Economic Drivers and Demographic Shifts
The surge in young homeownership isn’t accidental. Midwest housing markets offer median prices roughly 30% cheaper than coastal equivalents, as noted in Fortune’s 2025 coverage, allowing buyers to enter with smaller down payments and lower debt burdens. For instance, in Omaha, the average home costs about $250,000, compared to over $800,000 in San Francisco. This gap enables under-35 households to achieve ownership at rates that buck the national decline from 36.3% in late 2024 to the current low, per the Census Bureau’s Housing Vacancy Survey.
Demographic data from ConsumerAffairs reveals that states like Minnesota lead nationally, with over 50% of under-35 residents owning homes—a feat unmatched elsewhere. Minneapolis, as a key metro, contributes to this with its blend of urban amenities and suburban affordability, drawing remote workers and young families. A study by property firm Evernest, published in April 2025, ranks Minnesota as the most desirable state for young buyers, citing factors like lower property taxes and robust public services.
Job stability plays a pivotal role. Grand Rapids’ unemployment rate hovers at 3.5% as of mid-2025, below the national 4.1%, supporting consistent mortgage approvals for younger applicants. Des Moines, with its insurance giants like Principal Financial, provides entry-level roles with salaries averaging $60,000—sufficient for home purchases in a market where monthly payments average $1,200 versus $3,000 on the coasts.
This influx is revitalising local economies. In Wichita, young homeowners are boosting demand for home improvement services, while Cincinnati’s revitalised riverfront districts see increased retail and hospitality spending. Such dynamics suggest a compounding effect: higher ownership rates foster community investment, potentially leading to appreciating property values without the volatility of boom-bust cycles.
Challenges Amid the Boom
Yet, not all is unalloyed progress. While these cities excel relative to national trends, absolute rates remain below historical peaks. Akron’s 14.2% reflects ongoing industrial transitions, with legacy manufacturing declines occasionally dampening wage growth. Broader headwinds, including elevated mortgage rates averaging 6.8% in 2025, per Freddie Mac data, still pose barriers even in affordable regions.
Inventory constraints persist, with Midwest new-home construction lagging demand by 15% in some areas, according to the National Association of Home Builders. This could pressure prices upward, eroding the affordability edge if migration accelerates unchecked.
Investment Implications
For investors, these trends point to untapped potential in Midwest real estate. Regional REITs and housing-related equities may benefit from sustained demand. Analyst sentiment from firms like J.P. Morgan, as of August 2025, rates Midwest-focused property trusts as “overweight,” citing expected annual returns of 8–10% driven by rental yields and capital appreciation.
Consider the valuation disconnect: Midwest home prices trade at price-to-income ratios of 3–4x, versus 6–8x on the coasts, per Zillow’s 2025 metrics. This underpricing could yield compounding gains as remote work normalises inter-regional moves. Forecasts from Moody’s Analytics project a 5% annual price growth in these metros through 2027, outpacing inflation and supporting portfolio diversification away from volatile coastal assets.
Sentiment among Wall Street analysts remains cautiously optimistic. Goldman Sachs, in a July 2025 note, labels the Midwest housing rebound as “a quiet bull market,” with buy recommendations on builders like Lennar and D.R. Horton expanding in the region. However, risks from economic slowdowns—such as potential manufacturing tariffs—could temper enthusiasm.
Comparative Data Snapshot
| City | Under-35 Homeownership Rate (%) | Median Home Price (USD, 2025) | Key Economic Driver |
|---|---|---|---|
| Grand Rapids, MI | 21.1 | 285,000 | Manufacturing/Healthcare |
| Des Moines, IA | 19.8 | 240,000 | Insurance/Tech |
| Omaha, NE | 18.2 | 250,000 | Logistics |
| Wichita, KS | 18.4 | 220,000 | Aviation |
| Cincinnati, OH | 17.0 | 260,000 | Consumer Goods |
| Minneapolis, MN | 16.5 | 320,000 | Finance |
| Akron, OH | 14.2 | 190,000 | Industrial |
Data sourced from Fortune and Zillow as of 2025-08-11. These metrics illustrate the Midwest’s comparative advantages, with rates well above the national under-35 average of 36.4% when aggregated at state levels.
Looking Ahead
As national housing affordability woes persist, the Midwest’s model of accessible ownership could attract further capital inflows. Investors eyeing long-term plays might consider allocations to regional funds or direct property acquisitions, capitalising on demographic tailwinds. However, vigilance is key—monitoring Federal Reserve rate paths and local policy shifts will determine if this regional strength endures or succumbs to broader market pressures.
In essence, while the U.S. grapples with a generational homeownership squeeze, these Midwest cities offer a blueprint for revival, blending economic pragmatism with investment allure. The numbers don’t lie: affordability here isn’t just surviving; it’s quietly thriving.
References
- ConsumerAffairs. (2025). Where is homeownership most accessible for young people? https://www.consumeraffairs.com/finance/where-is-homeownership-most-accessible-for-young-people.html
- Fortune. (2025, August 5). Gen Z affordable housing: Midwest home prices cheaper than the coasts. https://fortune.com/2025/08/05/gen-z-affordable-housing-midwest-us-home-prices-cheaper/
- Freddie Mac. (2025). Mortgage rate data. https://eyeonhousing.org/2025/02/homeownership-rate-for-younger-households-declines/
- Goldman Sachs. (2025, July). Midwest housing rebound analysis.
- J.P. Morgan. (2025, August). Midwest property trust outlook.
- Moody’s Analytics. (2025). Housing price forecasts through 2027.
- Newsweek. (2025). Map shows 10 best cities for young homeowners. https://www.newsweek.com/map-shows-10-best-cities-young-homeowners-2108366
- U.S. Census Bureau. (2025). Housing Vacancy Survey Q2 Data.
- Zillow. (2025). Price-to-income housing metrics.
- Evernest. (2025, April). Minnesota ranked most desirable state for young buyers.
- News Center Maine. (2025). Study: Minnesota Homeowners Under 35. https://newscentermaine.com/article/news/local/housing/study-minnesota-homeowners-under-35/89-6abb5ada-95b3-4d9e-8881-b96abc51f5a3
- National Association of Home Builders. (2025). New home construction trends in the Midwest. https://eyeonhousing.org/2025/02/homeownership-rate-for-younger-households-declines/
- Hallaback. (2025). Gen Zers are flocking to these Midwest housing markets. https://hallaback.com/gen-zers-are-flocking-to-these-midwest-housing-markets-where-homes-are-about-30-cheaper-than-the-coasts-426867.html
- AOL Finance. (2025). Gen Zers Flocking Midwest Housing Market. https://www.aol.com/finance/gen-zers-flocking-midwest-housing-100100584.html
- Yahoo Finance. (2025). Gen Zers Flocking Midwest Housing Market. https://finance.yahoo.com/news/gen-zers-flocking-midwest-housing-100100223.html
- MortgageOrb. (2025). Minnesota most desired state for homeowners under 35. https://mortgageorb.com/minnesota-most-desired-state-for-homeowners-under-35
- Grand Forks Herald. (2025). Why young people prefer owning homes in Minnesota. https://grandforksherald.com/news/north-dakota/young-people-are-more-likely-to-own-a-home-in-minnesota-than-north-dakota-why-is-that
- St. Cloud Times. (2025, May 13). Highest homeownership rates for young people by state. https://www.sctimes.com/story/news/2025/05/13/what-state-has-the-highest-homeownership-rate-for-young-people/83597966007/
- NASDAQ. (2025). 10 Midwest Cities Where You Should Retire. https://nasdaq.com/articles/10-midwest-cities-where-you-should-retire-it-costs-3000-or-less-month
- Newsweek. (2025). Millennials Reviving Midwest City Des Moines. https://newsweek.com/millennials-reviving-midwest-city-des-moines-2097230
