The United States economy and the housing market are in the midst of challenges right now, but it's often a mixed picture depending on where you are. For example, many major Western markets have seen big declines off home price highs during the pandemic, while other markets in places like the Sunbelt are actually once again hitting record levels as far as pricing. Much of this is due to limited inventory and an unwillingness of current owners to move because of interest rates.
Over the past 25 years, some home prices have doubled, but there are property owners in other areas that have hardly gained any value comparatively.
There was recently a SmartAsset study that looked at 400 metros in the U.S. ranked by their growth in home prices since 1998.
On average, throughout the U.S., home values grew by 154% from 1998 through the first quarter of 2022. However, the 15 cities ranking in the bottom only saw 66% price growth averages.
The worst markets for long-term growth include:
- Montgomery, Alabama
- Springfield, Illinois
- Peoria, Illinois
- Bloomington, Illinois
- Rockford, Illinois
- Decatur, Illinois
- Saginaw, Michigan
- Kokomo, Indiana
- Lawton, Oklahoma
- Toledo, Ohio
- Charleston, West Virginia
- Cleveland, Ohio
- Kankakee, Illinois
- Macon, Georgia
- Bay City, Michigan
Montgomery, the worst city for growth in home values, has seen prices increase just 59.6% since 1998. The city's population has been declining, and almost ¼ of all residents live in poverty based on data from the U.S. Census.
Many of the cities on the list are in Illinois, which as a state, has seen average price growth of just 61.8% since 1998. Over the past decade, a steady number of residents have left, leading to prices going down.
On the other hand, Austin, Texas, had the biggest growth in home prices during this time, with values going up an average of 354%. California also saw significant increases in home value, as did Florida. In California, the bigger cities like San Francisco had the most growth in prices, and in Florida, Miami and Naples, both had price growth that was more than 290% since 1998.
What about if you want to sell a house currently?
Michigan has three of the worst five housing markets regarding stability and growth. Over the past 25 years, these locations have seen a house price index with an average annualized growth of 2.62% or less.
Specifically, the Flint metro was the worst housing market in 2022 in terms of growth and stability. Based on data, the chances of a home price dropping more than 5% in value within ten years of buying it was 45%.
Monroe, Michigan, which is around 40 miles south of Detroit, is another of the country's worst markets for growth and stability.
Finally, also making this list for 2022 are East Stroudsburg, Pennsylvania, which is in the Poconos, and the Detroit metro, which also includes Dearborn and Livonia. Rockford, Illinois, was number five on this list regarding the country's worst housing markets. According to data, if you bought a home in the Rockford metro between 1997 and 2021, there was a 39% chance it would have lost at least 5% of its value within ten years of your purchase.
