A lot is going on in housing at the moment. Interest rates are soaring despite being at record lows at the start of the year. The economy is appearing to falter, and the housing market is cooling following the pandemic boom.

While these can be anxiety-producing events, they’re also chances to look for value.

One way to do that is to assess currently undervalued housing markets.

To find an undervalued property, it’s essential to understand the local market based on data and research. When specific properties are undervalued, the cost is lower than the as-is value. You also have to compare the average prices of homes with the income in the area, which is detailed below as the home value-to-income ratio.

With those things in mind, the following are 10 of the most undervalued housing markets right now.

1. Dallas-Fort Worth

The Dallas-Fort Worth metro has a home value-to-income ratio of 3.0, compared to a national average of 3.3.

Comparing this to other major cities, you can see how the Dallas-Fort Worth metro looks even better—Austin has a ratio of 4.0, San Francisco has a 6.0, and Los Angeles has a 7.9 meaning home values are significantly more than incomes.

Texas generally has affordable home prices, and it also has no state income tax.

2. Knoxville

Knoxville, Tennessee, has some of the most affordable home prices of comparable areas in the country. The median property value is around $288,878, with a home value-to-income ratio of 2.7.

In 2020 alone, around 10,000 people moved to the Knoxville area. One issue to keep in mind is that home prices are increasing faster than cumulative wage growth in the city so you have to weigh that metric if you’re looking for an affordable place to call home.  

3. Huntsville

Huntsville, Alabama, has a home value-to-income ratio of 2.6. Home prices went up 24.6%, while wage increases were only 13.4% over the past three years, but at the same time, jobs have gone up more than the national average (4.7%).

Recently, in a list of 200 metros, Huntsville was number five for career opportunities.

4. Daphne-Fairhope-Foley

A metro in Alabama, Daphne-Fairhope-Foley, had a population increase of 7.8% between 2017 and 2020, compared to a national average of 1.3%. From 2018 to 2021, weekly wages went up 36.6%, and house prices went up only by 17.7%, which is a promising indicator for would-be buyers.

Between 2018 and 2021, non-farm payroll employment went up by 5.7%.

5. Fayetteville-Springdale-Rogers

A metro area in Arkansas and Missouri, the home value-to-income ratio is 2.7 here.

Fayetteville has seen significant job growth over the past three years, and gains in wages have kept up with the increases in home prices. House prices have cumulatively increased at a rate of 19.1% over the past three years, and during this same period, there was a 21% increase in average weekly wages.

6. Pensacola-Ferry Pass-Brent

In Florida, the Pensacola area has a low home value-to-income ratio. Along with its excellent beaches, it’s become an attractive location for remote workers in recent years, in addition to the typical population of retirees.

7. Palm Bay-Melbourne-Titusville

This Florida metro is less expensive than many other Florida cities, and the area of the state has the second-fastest wage growth compared to other cities on this list.

The home value-to-income ratio in this metro is 2.9, compared to 4.7 in Miami and 3.9 in Orlando.

8. San Antonio-New Braunfels

The San Antonio metro’s median home value is only $227,784. In 2020, there was a domestic migration of around 26,000 people, and there’s been an increase in the area's population of 4.8%, primarily driven by housing affordability.

9. Spartanburg

Spartanburg, South Carolina, has a home value-to-income ratio of 2.5, with a median home value of just $181,571. The city is conveniently located between Charlotte and Greenville, and from 2017 to 2020, it saw major population growth.

10. Tucson

Finally, compared to another Arizona city, Phoenix, Tucson is much more affordable. The median property value in Tucson is just $261,046, compared to the value in Phoenix, which is $364,186.