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Best Cities for Homeownership in Missouri

Owning a home in Missouri is a much better prospect than in some other parts of the country. To start, Missouri real estate in general is much cheaper than the rest of the United States, with the median home here valued at $145,400 — 25% less than the rest of the country. But there are pockets within the state where homeownership is an even better prospect. Home prices that appreciate quickly can offer a better return on your investment, and living close to employers can mean for a faster commute, for example.

Our researchers at LendingTree looked at these values and more for each of the major Missouri metropolitan and micropolitan statistical areas. We used the American Community Survey by the U.S. Census Bureau from 2013 to 2017 to examine data on metropolitan statistical areas (MSA) and micropolitan statistical areas. A micropolitan area is defined as having a population of 10,000 to 50,000.

For each area, we examined the median home value, unemployment rate, average commute time, median home value appreciation, and median change in yearly housing costs, which measures the cost of homeownership. We then ranked each factor and combined them all to calculate the best places to own a home in Missouri.  

Key findings

  • The Columbia metro area is the best place for homeownership in Missouri. It has the highest median home value ($184,500), low unemployment (4.4%), a short average commute time of 17.9 minutes, and home values that increased from 2013 to 2017 (10.35%).
  • The Kennett nicro area is the worst place in Missouri for homeownership. It has the lowest median home value ($79,400), higher unemployment (6.9%), and had increasing housing costs from 2013 to 2017 (2.48%).
  • The Lebanon micro area ranked eighth. It has the greatest increase in home values from 2013 to 2017 (20.91%) and decreasing housing costs during the same period (-1.70%). It did not rank higher due to high unemployment (7.7%) and long average commute times (21.3 minutes).

The best cities for homeownership in Missouri

1. Columbia metro area

It’s appropriate that Columbia is the number one spot on our list, given that it’s located in the heart of the state. It’s also home to the University of Missouri. In addition to the education field, residents can get jobs in a wide range of industries ranging from health care to insurance.

Accordingly, the unemployment rate here is a low 4%. Homes are rather on the pricey side (at least compared to the other cities on the list), at a median value of $184,500. But, you will have a short commute if you live here — the average residents spend just 18 minutes getting to work each day.

2. Quincy, IL-MO micro area

Quincy is actually a city in Illinois, but don’t let that fool you. The city stretches across the Mississippi River into the northeastern corner of the state, where it forms our second-most-favorable location to buy a home. The median home price in this area is $124,300, and, luckily for homeowners, homes have appreciated in value over the years. From 2013 to 2017, the median home price increased by 17% — a great return on your investment.

Most residents here have a short commute as well of 18 minutes. Many of them are likely crossing the bridge over the Mississippi River to the Illinois side of the town to work, where the biggest developed area is in the region.

3. Maryville micro area

There’s a lot to like about living in Maryville, in the northwestern corner of the state. Plenty of water features are nearby to help with the hot summer weather, with the oddly named One Hundred and Two River and Mozingo Lake. You can generally expect a home in this area to cost around the median value of $134,300, and homeowners benefited from a moderate (17%) amount of appreciation between 2013 and 2017.

Homeownership costs such as taxes, repairs and insurance increased here more than any other town on our list over those same years — by 5%. However, that’s a token amount. Residents here also have the shortest commute times of all compared to the other cities on this list, at an average of 16 minutes.

4. Fayetteville-Springdale-Rogers, AR-MO Metro Area

Here’s another case where a major metropolitan area is located just over state lines (Arkansas in this case), but the area rises far enough into the far southwestern corner of  Missouri for it to be included on our list. This metro area is one of the fastest-growing areas of the country, partially thanks to Walmart, whose headquarters is located just over the border in Bentonville. Unemployment is at a low 4%, and most people have a 21-minute average commute time to work. You can expect to buy a home for somewhere around a median value of $163,200.

5. Marshall micro area

Surrounded by farmland, Marshall lies about 55 miles from Columbia (the top pick on our list). If Columbia is out of your price range, Marshall is a good option, as homes are much cheaper here. The median home value in Marshall is $95,600 — around $90,000 less than Columbia. Homeowners here have seen a relatively small return on their investment over time, given that home prices rose by 11% from 2013 to 2017. On the bright side, the community is relatively well-laid-out, given that the average commute time for residents is 17 minutes.

6. Kansas City, MO-KS metro area

The Kansas City metro area, another border-straddler, stretches across the Missouri-Kansas line. The area has a robust economy with major industries, including the federal government, health care, electronic equipment and even greeting cards (Hallmark’s corporate office). Kansas City also features SubTropolis, the world’s largest underground business complex at 6 million square feet. Unemployment is moderate at 5%.

Homes here are pricier, but still cheaper than the rest of the state at a median value of $175,100. Homes here have appreciated only slightly in value over the years, rising just 6% from 2013 to 2017.

7. Sedalia micro area

Sedalia is also located in the same area of the state as Columbia, the top city on our list, around 67 miles to the southwest. It is home to the Missouri State Fair, which is appropriate, given that agriculture forms the backbone of the city’s economy (along with retail businesses, construction, military and food services). The median home price in Sedalia is $114,000, and homes rose in value by just over 11% from 2013 to 2017. Homeownership costs stayed the same over those same years. Sedalia is also another community with short commute times — averaging around 18 minutes, making it a great place for people who despise big-city traffic.

8. Lebanon micro area

Lebanon is located just outside of the sprawling Fort Leonard Wood military complex in central Missouri. It’s also home to a range of manufacturers, especially those who make aluminum boats for fishing. Fishing is a popular pastime in the town as well, with many opportunities for sportsmen and women.

Despite the area’s many employers, unemployment is a bit on the high side at 8%, more than twice the state’s unemployment rate (3%). However, homes are reasonable, priced around $125,500. Even better for homeowners, home values have been increasing over the years, rising 21% from 2013 to 2017.

9. St. Joseph MO-KS metro area

St. Joseph is the last border-straddling metro area on our list. It lies along the Missouri River, which also happens to be the border with Kansas. The area is also home to many industries, although unemployment is still moderate at 5%. In order to get quality jobs, some people travel as far south as Kansas City (a 50-mile drive), although given that the average commute time is 19 minutes, most people seem to be able to find employment within the city proper.

Homes here are more reasonably priced than in Kansas City as well, coming in at a median value of $124,100. However, this area was knocked a bit further down on our list because home prices have barely risen over the years, increasing by just 3% from 2013 to 2017.

10. West Plains micro area

West Plains is the terminus for people working or playing in the south-central Missouri area. It’s a typical American town, with affordable home prices with a median value of $115,700. That’s great for people buying homes, but what really helps out homeowners is appreciation. Home values were up 10% between 2013 and 2017, while homeownership costs only rose by 2% during that same time.

Unemployment rates are still moderate at 5%, and most residents are lucky enough to live close to their places of employment. In fact, the average commute time was 20 minutes for West Plains residents.

Homebuying tips for Missouri

Several communities on our list are not only good places for homeowners to live, but they’re relatively easy for new homebuyers coming into the market as well. Homes in Missouri are generally more affordable than in the rest of the United States, but still — buying a home is challenging. Specifically, in Missouri, many people are dealing with a changing real estate market.

The median home sales price in Missouri increased by 13% from 2017 to 2019, according to a report from the Missouri RealtorsⓇ group. Rising home prices mean that you’ll need to save even more for a home down payment. Most experts recommend saving up for at least a 20% down payment, although it is possible to find some mortgages with down payments as low as 3.5%, or even zero in some cases (although these may end up costing you more in the long run).

For the median-priced home ($145,400) in Missouri, a 20% down payment means saving up at least $29,080 to buy a home (not including closing costs and a reserve fund for maintenance, repairs, etc.). That’s a lot of money to save, but there’s good news. You may qualify for Missouri-specific down payment assistance.

If you’re a first-time homebuyer (or a divorced person who hasn’t been listed on a home’s title for at least three years), there’s even better news. Now, you can save for a home down payment and lower your tax bill at the same time. The state recently approved Missouri First-Time Homebuyer Savings Accounts, which are available at local banks and credit unions.

As of January 2019, you can save up to $3,200 per year for couples who file jointly (or $1,600 per year for single filers) in these savings accounts and deduct 50% of your contributions from your state taxes. For example, if you and your spouse save the maximum amount of $3,200 this year, you can deduct $1,600 when you file your state taxes at the beginning of next year. You can contribute up to a maximum amount of $20,000 to this account.

Another way that the Missouri real estate market is changing is that homes are selling much faster these days. In January 2017, the average home was on the market for 112 days. In January 2019, homes were only on the market for 62 days on average — a 45% decrease. Home sales have also been decreasing, by 8% over the past two years.

All of this means the housing market is getting tighter, which puts a lot of pressure on you — the homebuyer — to say yes to the first house that crosses your path. That’s why it’s especially important to find a good real estate agent who’ll help you make a rational decision about which home is actually the best one for you before you agree to purchase it. A home purchase can affect the rest of your finances for life, after all.  

Methodology:

The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical area from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 31 (Best) to 1 (Worst) for five metrics. Those metrics are:

Median Home Value (31-Highest Value, 1-Lowest Value)

Unemployment Rate (31-Lowest Rate, 1-Highest Rate)

Average Commute Time (31-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017)(31-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017)(31-Smallest Cost Change, 1-Greatest Positive Cost Change) – The formula for this metric is

(((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA based upon the scores they received for each metric.

4: The MSAs and micropolitan statistical area were then ranked on a scale of 1 (Best) to 31 (Worst) based on their average score.

5: All metrics were ranked equally.

Data:

All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American

Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filter for Selected Economic Characteristics – 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates
 

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