Homebuyers looking for affordability are flocking to ‘refuge markets’

Housing markets across the US struggled with historically strained affordability in 2025, but a handful of smaller, more budget-friendly metros stood out by offering buyers a chance to become homeowners without breaking the bank.

These “refuge markets,” predominantly concentrated in the traditionally affordable Midwest — with a few exceptions — posted some of the year’s strongest price gains, fueled in part by an inflow of home shoppers on a budget. 

Realtor.com® senior economist Jake Krimmel explains that what sets these select few markets apart is that the average purchaser can still afford a home there, unlike in some of the larger, more expensive metros where high prices and mortgage interest rates stuck in the low 6% range have put homeownership out of reach for many.

“November’s data show how these affordable metros have become magnets for cost-conscious movers and how this shift is reshaping the geography of US housing demand,” says Krimmel, referring to the latest monthly housing market trends report from Realtor.com.

Buyers have been flocking to refuge markets since 2022, when mortgage rates crossed the 6% threshold after a COVID-19 pandemic price surge, making purchasing a home even less feasible.

As Krimmel explains, for many lower-income buyers, the only way to attain homeownership without becoming house-poor was to move “down-market,” focusing on metros where prices were 20% to 30% below the national median to offset the soaring financing costs.

The Midwest boasts the most ‘refuge markets’

The top 10 refuge markets have seen the biggest annual increases in median list price per square foot — and most have experienced double-digit growth in the teens and low 20s since 2022. 

Grand Rapids, MI, saw the biggest year-over-year increase in the price per square foot, at 5.5% — and an appreciation rate of over 15% compared to three years ago.

In November, the typical home in Grand Rapids cost $389,900, or more than $25,000 off the national median.

St. Louis — a legacy city brimming with art, culture, and sports at a more reasonable price compared to a major metro like Chicago — emerged as the second most popular refuge market, with the price per square foot there jumping 5% year over year and nearly 8% over three years.

“We have phenomenal infrastructure in place, and we have a great history,” Tommy Espenschied, with ReeceNichols Real Estate in St. Louis, tells Realtor.com. “There are a lot of great attractions, entertainment, amazing food, and really beautiful homes with lots of options.”

Buyers looking for an urban lifestyle tend to choose homes within St. Louis’ inner city, while those who want more outdoor space focus their search on the suburbs.

Espenschied says there has been a lot of interest from home shoppers as far away as Los Angeles and the San Francisco Bay Area, who tend to purchase larger, more expensive properties in town.

“When you see how far your dollar can go, it definitely attracts a lot of people,” says the agent, stressing that Californians’ presence in St. Louis has been growing.

For context, the typical home in St. Louis came with a $291,900 price tag in November — nearly one-quarter of the median price in LA.

St. Louis is also drawing strong homebuyer traffic from Chicago, New York City, and Denver.

According to Espenschied, out-of-town buyers are attracted to St. Louis’ value — whether measured by the price per square foot or per acre — as well as the city’s strong schools and desirable lifestyle perks.

“One of the beautiful things about St. Louis is that you can live 25 miles outside of the city of St. Louis, and it might only be a 40-minute drive in the morning, which is certainly not the case if you’re coming from LA, San Francisco, New York, or Chicago, where going a couple of miles is quite a hassle,” notes Espenschied.

St. Louis’ inventory has tightened over the past two years, putting upward pressure on prices, but the agent says most buyers have adjusted to this “new normal.”

“If you’re willing to do a little bit of work, there’s actually some really solid inventory out there,” says Espenschied. “There are some very beautiful projects to be done here in St. Louis, and that would be the best opportunity to really build equity into whatever deal you’re looking for.” 

Cleveland saw the third-highest year-over-year increase in the price per square foot, at 4.5% — and the second highest since 2022, exceeding 20%. The median price in the Rock ‘N’ Roll Capital of the World was just $250,000 in November, making it one of the most pocketbook-friendly housing markets in the US.

Mike Valerino, CEO of Akron Cleveland Association of Realtors, tells Realtor.com that affordability remains Cleveland’s strongest draw, with more than 63% of all households in the metro being able to afford the typical home.   

“Buyers gain not just lower prices but a higher likelihood of qualifying for a mortgage, and more living space for the same or lower monthly cost than in higher-priced metros,” he says. 

The National Association of Realtors® buyer migration data for the Cleveland metro shows that 12.2% of recent buyers moved from another state, which Valerino notes is meaningful for a Midwest city with historically modest in-migration. 

According to Valerino, much of the outside demand is coming from top-dollar coastal markets like New York, New Jersey, Boston, LA, and the San Francisco Bay Area, as well as Washington, DC, and Chicago. 

“Many of these buyers explicitly cite that Cleveland allows them to purchase the kind of home that would be unattainable in their previous city,” adds the CEO. 

Other benefits highlighted by newcomers to Cleveland relocating from pricier areas include more square footage and larger lots, lower monthly mortgage payments, shorter commute times, and strong amenities, including top-notch health care, universities, and a vibrant arts and culture scene.

Looking to 2026, Valerino expects Cleveland to see moderate but sustainable price growth, expanding inventory, continued demand from outsiders, and improving affordability—if mortgage interest rates continue to trend down. 

“Cleveland should remain one of the most accessible large metros for homeownership in the country,” he predicts. 

Another popular Midwestern hub, Milwaukee, came in fourth in the price-per-square-foot appreciation since last year, at 4.2%, but saw a staggering 21% surge compared to 2022. 

Pittsburgh—the nation’s most affordable housing market with a median price below $250,000—clinched the fifth spot in the ranking of top refuge markets with a 3.7% year-over-year price increase, tied with Buffalo, NY (+3.7%) and Louisville, KY (+3.7%) and followed by Providence, RI (+3.4%); Cincinnati (+2.9%); and Virginia Beach, VA (+2.1%).  

“This is part of a larger trend relating to affordability and the geographic reshuffling of housing demand,” sums up Krimmel. “Refuge markets reveal how families adapt when traditional paths to affordability narrow. In a high-rate, high-price environment, demand shifts to metros where the math still works.”

That recalibration fueled standout price growth in modest metros that rarely make national headlines, and Krimmel says it highlights “how deeply the affordability crisis is reshaping the US housing geography.”

The national housing market is cooling

The US housing inventory expanded by 12.6% year over year in November, which marked the 25th consecutive month of growth, albeit at a slower pace, according to the monthly trends report.  

Many buyers continued clinging to the sidelines, with the typical home spending three days longer on the market compared to November 2024, reaching a median of 64 days. 

This marked the 20th straight month of listed homes taking longer to sell on an annual basis. 

The slowdown was most evident in the well-supplied West and South, while inventory-challenged Northeastern and Midwestern metros continued seeing faster-than-normal sales due to intense competition among buyers. 

The national median list price was $415,000 in November, down 0.4% from last year. 

Three of the four regions saw either flat or› decreasing prices, with only the Midwest — the refuge market destination — seeing a 1.7% year-over-year increase.