In general, the Midwest tends to be much more affordable than coastal areas in the United States. As noted by Fortune, it’s primarily because of lower housing costs, with homes often around 30% to 50% cheaper than the national average.
In fact, according to Gagan Saini, real estate expert at JIT Home Buyers, qualities such as affordable housing and living, emerging hubs and enjoyable natural assets make the Midwest an attractive location for families and individuals seeking a place to enjoy life and grow wealth.
Still, there are some states like Illinois and cities like Chicago which have been called out for high costs of living. Those higher prices can drain budgets and wealth. Below are more affordable Midwest states that make it easier to grow wealth.
5 Affordable States To Consider
If you’re looking for Midwest states where you may be able to hold on to more of your money and grow your wealth at the same, several real estate experts gave GOBankingRates the same list of below states.
- Tennessee
- Missouri
- Ohio
- Indiana
- Iowa
“I focus most of my attention on affordable markets in the Midwest and south, avoiding higher-priced markets on the coast,” said Eric Hughes of Rental Income Advisors. “There is actually an ‘affordable zone’ in the U.S. It’s a fat slice of the country that runs from the Great Lakes to the Gulf.”
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Costs of Home Ownership
“Property taxes and maintenance fees in many Midwestern states are lower than in other regions, helping keep ownership costs in check,” said Seamus Nally, CEO of TurboTenant. “The cost of construction and land remains low because there is ample available land. Demand pressure is lower than in coastal regions, so prices and rents have not escalated as strongly despite a strong local labor market.”
Hughes said here’s something to keep in mind — home prices in a given market are a function of aggregate demand.
“This means that affordable markets tend not to have growing populations — instead, they have stable or falling populations, which keeps housing demand stable or low compared to growing markets,” Hughes said. “Some people think that means these markets are dying, but they’re not; many are still seeing significant investment from both the private sector and the government.”
Wealth-Building Potential
According to Sain Rhodes, real estate expert and customer success manager at Clever Offers, people often underestimate the potential wealth-building impact of property taxes across the Midwest.
“Wisconsin and Illinois property taxes are 40% to 60% higher than those in Iowa and Indiana,” Rhodes said. “One of my clients relocated from Wisconsin to Iowa with the same home value and reduced her annual tax bill by $4,100. Over 30 years, this amounts to a significant sum, perhaps enough to accelerate the mortgage payoff or contribute to early retirement.”
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This article originally appeared on GOBankingRates.com: Is Your Midwest State Quietly Draining Your Wealth? 5 More Affordable States for Midwesterners To Grow Wealth
