The Cheapest Housing Market in America

By Douglas A. McIntyre Published Sep 25, 6:50AM EDT

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The carefully followed S&P Case-Shiller index, which covers housing prices each month, showed that these rose again in July.
However, Detroit remains the cheapest housing market in America.
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How cheap or expensive a housing market can be measured in several ways. One of the most carefully watched research reports about home prices by major metropolitan area is the S&P Case-Shiller Indexes. They are released monthly and monitor the increase in home prices in 20 cities over time.

Home prices rose 5% in July compared to the year before. Increases have become a trend over the past several months. “Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” says Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets. Case-Shiller researchers do not comment much on why the trend is so strong. One reason is probably a low inventory level nationally due to people staying in homes with low mortgage rates because the Federal Reserve kept interest rates near historic lows to boost the economy. Some of these people have 30-year fixed mortgages with a rate of under 3%.

Case-Shiller also examined home prices in the top 20 markets over a period that began in January 2000. Each city received an index of 100 at that time. In the cities where prices have grown rapidly, the number has risen to 300 or more over the past 24 years. In cities where prices rose very little in that time, the number is under 200.

Detroit is the city where home prices have risen the least as of July. Its index, based on its increase from January 2000, is 191.19. Cleveland is a close second at 195.71.

Case-Shiller does not explain why some markets have cheaper homes than others. However, Detroit’s 31.9% poverty rate, according to Census Bureau data, is likely one reason.

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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.