Home prices are rising fastest in rural America as incomes lag

  • The median home sale price in rural areas is up 61% from pre-pandemic
  • That's larger than the gain in suburban (49%) and urban areas (46%)
  • Household income in rural counties has increased the least, just 33%

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(NewsNation) — America is facing a housing affordability crisis, and rural areas have been hit especially hard in recent years.

The income needed to afford a home in rural counties has jumped nearly 106% since 2019, according to Redfin — outpacing the rise in suburban (91%) and urban counties (88%).

The reason: Prices have soared much faster than wages in rural America.

Redfin found that home prices have gone up the most in rural counties, with the median sale price up 61% from before the pandemic, compared with 49% in suburban areas and 46% in cities. At the same time, rural households have seen the slowest wage growth — just 33%, versus 37% in the suburbs and 39% in urban areas.

Those price pressures were amplified during the pandemic, when record-low mortgage rates and remote work sent a wave of urbanites into rural markets, where thin housing supply made competition — and prices — shoot up.

That dynamic is especially stark in the Northeast, where several states have seen rural home prices surge by more than 80% since the third quarter of 2019.

New Hampshire leads the nation with an 88% jump, followed closely by Vermont (87%) and Maine (85%).

“During the pandemic, many buyers came to New Hampshire from out of state — places like New York, Texas, California, and Seattle,” Julia Martinage, a Redfin premier real estate agent in New Hampshire, said in the report. “They often had larger budgets than locals and were able to pay above the asking price.”

Homebuyers in rural New Hampshire now need to earn almost $120,000 to afford the median-priced home — up 141% from before the pandemic. Rural buyers in Vermont (139%) and Maine (137%) have seen similar increases.

Outside the Northeast, rural areas in the Mountain West have also seen sharp price gains since pre-pandemic, including Utah (83%), Idaho (78%) and Montana (77%).

Rural areas are still more affordable overall

Affordability is eroding fastest in rural areas, but they’re still the cheapest places to buy a home.

The median sale price in rural counties was $280,900 last quarter, compared with $385,000 in the suburbs and $446,000 in urban areas, according to Redfin.

Buyers also need far less annual income: about $75,000 to afford the typical rural home, versus $102,000 in suburban counties and $118,000 in cities.

Those advantages continue to draw buyers to rural markets, even as affordability slips.

“Rural America isn’t as affordable as it once was, but the silver lining is that unlike many urban areas, there’s still room to build homes,” Redfin senior economist Asad Khan said in the report.

The findings come as housing affordability has become a major political flashpoint nationwide. The typical first-time buyer is older than ever, and about a third of American households spend more than 30% of their income on housing.

Recently elected New York City mayor Zohran Mamdani won in part due to major promises on housing — and Redfin’s data suggests such a message could resonate well beyond America’s largest city.

As rural affordability continues to deteriorate, candidates who lead with housing may discover a receptive audience outside city limits.

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