Real Estate

Woman Buys 4-Bedroom House in St. Louis for $135K Amid Midwest Affordability

Midwest offers four-bedroom homes for $135,000, with mortgage payments averaging $1,553, the lowest in the U.S.

By Doug Elli

5/25, 08:27 EDT
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Key Takeaway

  • Alicia Williams bought a four-bedroom, two-bathroom house in St. Louis for $135,000, with monthly mortgage payments of $1,200.
  • The Midwest offers the most affordable housing in the US, with median mortgage payments at $1,553 compared to the national median of $2,100.
  • Home prices in Midwest cities remain lower than the national average; St. Louis has a median home price around $200,000.

Midwest: A Beacon for First-Time Homebuyers

Alicia Williams, a St. Louis native, recently transitioned from renting to homeownership, highlighting a significant trend in the Midwest housing market. After realizing her mortgage payments could be comparable to her rent, Williams purchased a four-bedroom, two-bathroom house for around $135,000. This move underscores the Midwest's appeal as the most affordable region in the U.S., with cities like St. Louis topping Zillow’s list of best places for first-time homebuyers. The region's affordability, thriving local economies, and community-friendly environments make it a prime destination for aspiring homeowners.

Affordable Housing and Economic Stability

The Midwest's housing market offers a rare combination of affordability and economic stability. According to the National Association of Realtors, the Midwest boasts the lowest mortgage payments in the U.S., averaging $1,553 compared to the national median of $2,100. This affordability is crucial as homeowners in the Midwest spend less than one-fifth of their income on mortgage payments, significantly lower than the 35% in the West and 25% in the Northeast and South. This economic stability is further supported by the region's slower pace of housing cost increases, making it a sustainable option for long-term homeownership.

Market Dynamics and Builder Confidence

The Midwest's housing market dynamics are characterized by a balance of demand and supply, with home prices remaining relatively stable. The median home price in St. Louis is around $200,000, significantly lower than the national average of $425,000. This stability is attracting home builders, with the National Association of Homebuilders reporting increased building confidence in the region. In April, new housing starts in the Midwest rose by nearly 20% monthly and close to 4% annually, indicating a positive outlook for future housing availability and affordability.

Broader Implications for the Housing Market

The Midwest's housing market trends reflect broader implications for the U.S. housing sector. As housing costs continue to burden American families, with 38% of a typical household’s income needed for a mortgage on a median-priced new home, the Midwest offers a more manageable alternative. The region's affordability could serve as a model for addressing the nationwide housing affordability crisis. Policymakers might look to the Midwest's strategies to increase housing supply and affordability, such as expediting permit approvals and investing in skilled labor training.

Street Views

  • Skylar Olsen, Zillow (Bullish on the Midwest housing market):

    "The Midwest stands out as an attractive region for aspiring homeowners because affordable housing is present and accessible there, and it’s scarce almost everywhere else. A larger number of affordable listings and less potential competition over those listings helps Midwest markets shine in this ranking."

  • Orphe Divounguy, Zillow (Neutral on the pandemic-era price growth impact in the Midwest):

    "The Midwest did catch the pandemic-era wave of extreme price growth, but it was later and less pronounced than in other parts of the country. Home prices in Midwest metros also started from a lower baseline, so even with massive appreciation, much of the housing stock is still affordable."