Detroit Is America’s Cheapest Housing Market

By Douglas A. McIntyre Published Dec 30, 7:30AM EST

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Detroit Is America’s Cheapest Housing Market — © RiverNorthPhotography / iStock Unreleased via Getty Images

Housing market statistics usually look back a year or two. Based on this, housing was unusually healthy from mid-2020 until the middle of this year. In the past few months, high mortgage rates have undermined prices and unit sales. The story is different when the numbers go back over two decades. According to new numbers, home sales prices have barely risen in Detroit, making it the cheapest housing market in the United States, particularly compared to 2000 prices.
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The S&P Case-Shiller home price index has been the gold standard of residential home values for years. Its analysis showed a surge in home values in 2020, 2021 and 2022. For much of late 2021 and early 2022, home prices rose about 20% year over a year most months. In some markets, that number was closer to 30%. That increase dropped to about 9% in October, and when measured month over the previous month, prices fell from September in all 20 cities the research covers.
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Another way Case-Shiller measures home prices is from where they were in January 2000. At that point, the research firm scored home values in the top 20 cities at an index of 100. This has allowed Case-Shiller to consider how home prices have risen over the past 22 years when each metro is compared to the others. Its experts wrote, “The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.” The national average from January 2000 to October 2022 was 298.99.
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The city where the index rose the least is Detroit, at 169.10. It barely edged out Cleveland, which had an index of 172.74 in October. The next lowest on the list was Chicago, at 185.79. None of the other top 20 metros had an index below 200.

Miami’s index of 400.72 shows the contrast from city to city in terms of home values since January 2000.
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It is impossible to pinpoint completely why the Detroit figure is so low. Its population in 2002 was 951,270. By 2022, the number had dropped to 632,464. The city also has the highest poverty level among all large metros in the United States. About a third of families live below the poverty line.

Detroit is likely to stay at the bottom of the Case-Shiller list. Almost nothing shows that the city can work its way out of its problems.

About the Author Douglas A. McIntyre →

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.