Midwest, East Coast Housing Markets 'Holding Up' Despite Rising Mortgage Rates

Mostly ignored during the stratospheric rise in most Sunbelt and coastal markets the past two years, the Midwest and East Coast markets are surviving the volatile homebuying environment that Tuesday saw 30-year fixed mortgage rates top 7%.

Redfin finds that Lake County, Ill.—located about 45 miles north of Chicago—is its top metro in its latest analysis. There, the typical home sells for approximately $315,000.

It’s followed by Albany and Chicago. Also in the top 10 are New Haven, Conn.; Milwaukee; New Brunswick, N.J.; Elgin, Ill.; Bridgeport, Conn.; Pittsburgh and El Paso; respectively.

The typical home in eight of the 10 markets costs less than the national median sale price of $407,000; New Brunswick ($480,000) and Bridgeport ($590,000) are the exceptions.

Already Priced Low Enough ‘Not to Fall’

Redfin Senior Economist Sheharyar Bokhari said in prepared remarks that these markets were slow to feel the impacts of economic headwinds like inflation and the Fed raising interest rates “because the relatively affordable home prices make them attractive to house hunters seeking deals, and homes are already priced low enough that there’s not much room to fall. These markets don’t have much volatility.”

Chicago Redfin agent Ashley Arzer said in prepared remarks, “There are still plenty of buyers looking for homes; many of them are people who didn’t stand a chance in last year’s competitive market but are relieved to see lower prices and fewer bidding wars.