The residential housing market has been on a roller-coaster for almost three years. Early in this period, worker mobility because of “work from home” plans due to COVID-19 allowed people to relocate. Mortgage rates were below 3% as well, and these two factors increased residential and housing activity and price spikes. Recently, a slow economy and high-interest rates have cooled the residential market considerably. One housing market has remained the cheapest for over two decades. According to the S&P Case-Shiller home price index, prices in Detroit have barely increased in decades.
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The recently released Case-Shiller figures show that the year-over-year price increase across the country was only 10% in September, much lower than the 20% earlier in 2022. Month over previous month, however, prices in September fell 1%. It has been well over a year since this happened.
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S&P Case-Shiller also looks at home prices over the past several decades. The 20 largest home markets all started at an index of 100. As home prices increased, market by market, the index rose more rapidly in some cities than others. For example, in September, the national index was 300.21. The number for San Diego was 394.16, and for Cleveland it was 174.62.
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Detroit’s figure was the lowest among the 20 cities at 170.66. Given the national growth, this is extraordinarily low. However, digging a bit deeper, Detroit’s population has dropped by more than half since 1950, mostly because car companies left. Most of the people who departed were middle class. Low-income residents remained. Detroit has among the highest poverty rates of America’s big cities.
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People who want an inexpensive home can look in Detroit. The downside is that no one wants to live there.
America’s Cheapest Housing Market
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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