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Best Cities in Louisiana for Homeownership

In Louisiana, it’s not just the summer weather that’s scorching; it’s also one of the hottest real estate markets in the country, with home values appreciating in every area, both large and small, and often by double digits.

But rising prices aren’t the only factor that matters for homeowners. They also need to be able to find work and keep up with their housing costs and other bills. This is still a problem for Louisiana, where homeowners are struggling with affordability in the more expensive markets like New Orleans.

That’s why we took more than just home prices into consideration. We also looked at the economic data and quality-of-life issues, like traffic, to figure out the best places for homeownership in Louisiana. Read on to see how every city did.

Key findings:

  • The Lake Charles Metro Area is the best place for homeownership in Louisiana. It has a low unemployment rate for the state (6.5%), a short commute time of 20.9 minutes, and increasing home values from 2013 to 2017 (12.21%).
  • The Bogalusa Micro Area is the worst place for homeownership in Louisiana. This place has a low median home value ($104,000), a high unemployment rate (12.3%), and the longest average commute time in the state, 33 minutes.
  • The New Orleans–Metairie Metro Area ranked seventh in Louisiana for homeownership. It has the highest median home value of $196,200, moderate unemployment for the state (7.1%), and the third-lowest increase in home values from 2013 to 2017 (4.81%).

The best cities for homeownership in Louisiana

1. Lake Charles

It was a close race between the top cities, but Lake Charles ended up with the highest score in our study. First, it has a solid housing market. The median price is an affordable $157,100 and growing at a steady rate. From 2013 to 2017, homeowners saw their property values increase by 12.21%.

On top of a growing housing market, Lake Charles residents also enjoy a strong economy with unemployment at just 6.5%, tied for third-lowest in the state. And because Lake Charles is a mid-sized city, the traffic is not as bad as it is in other parts of Louisiana, with the average commute at just 20.9 minutes. Thanks to a strong performance across the board, we rated Lake Charles as the best city for homeownership in Louisiana.

2. Ruston

Even though Ruston is one of the smaller micro areas in the state, it has a booming housing market. The median property value was $174,700 in 2017, behind only New Orleans and Baton Rouge. Ruston homeowners also enjoyed the second-greatest home appreciation from 2013 to 2017, with property values increasing by a mouthwatering 22.60%. Finally, Ruston has the shortest average commute times in the entire state — 19.3 minutes.

There are some issues though, which is why Ruston didn’t place first. Ruston has a high unemployment rate of 8.8%. Housing costs also went up by 8.17% over the past five years. While the nice housing value gains will offset some of these problems, they still put pressure on the typical resident’s budget.

3. Shreveport–Bossier City

Shreveport–Bossier City placed ahead of the other large Louisiana metro areas because it did the best job of balancing a strong housing market while keeping costs low. The median property value was $159,400, and homes appreciated by 11.7% from 2013 to 2017.

But even with this fast growth, the actual monthly cost of housing only went up by 2.73%, so homeowners came out well ahead. Finally, the economy and commute times were both better than average in Shreveport–Bossier City compared with the rest of Louisiana.

4. DeRidder

DeRidder homeowners have enjoyed arguably the very best investment results out of all parts of Louisiana. From 2013 to 2017, their properties appreciated nearly 22%. But while other parts of the state are struggling with affordability, housing costs here have barely gone up, increasing by only 0.51% over the past five years.

Though DeRidder residents must be thrilled with their property values, they are probably less happy with their commutes. The typical resident spends 30.1 minutes getting to work. DeRidder’s economy is also just average, with unemployment at 7.4%.

5. Opelousas

In 2017, Opelousas had the lowest unemployment rate in Louisiana (5.5%), thanks to a balanced mix of industries like agriculture, oil, manufacturing and retail. Homeowners benefited from the strong economy and saw their properties appreciate by 14.43% from 2013 to 2017.

But despite this growth, Opelousas is still affordable. Monthly housing costs only went up by 2.37% during this same period, and the median property value is just $115,000. One problem, though, is that Opelousas residents have longer commutes: 26.4 minutes on average, the fifth-worst in Louisiana.

6. Lafayette

Right in the heart of Cajun Country, Lafayette hosts an impressive housing market. The median property value was $164,000, pricey compared with other parts of the state but less expensive than New Orleans and Baton Rouge. The economy is also above average, with unemployment at 6.8%.

Lafayette’s property values are growing more quickly than the other large cities, with 8.32% appreciation over the past five years. However, that’s offset by a 3.23% increase in housing costs over this time. If you live in Lafayette, make sure to plan for these rising expenses.

7. New Orleans

The Big Easy has the most expensive housing market in all of Louisiana, with a median property value of $196,200. However, homes did not appreciate much from 2013 to 2017, as the median prices only went up by 4.81%. This did give homeowners some relief from overall monthly housing costs, as they only went up by 1.01%, one of the lowest increases in the state.

Despite being the tourism and economic hub of Louisiana, the economy in New Orleans has some issues: unemployment is at 7.1% and the average commute is longer than many cities on the list, at 25.8 minutes. That’s why even though New Orleans has the most recognizable name, it’s only middle-of-the-pack for our homeownership rankings.

8. Monroe

Monroe is the largest city in Northeast Louisiana and is home to a variety of parks, gardens and museums. The median property value was $149,500 and this is another fast-growing market, with 11.99% appreciation for home values from 2013 to 2017. Living in Monroe means dealing with less traffic than the other large cities, as the average commute is just 21.3 minutes, tied for fourth-shortest in Louisiana.

As far as the economy, Monroe is just average, with unemployment at 6.9%. Residents may be feeling a squeeze in their paychecks as monthly housing costs went up 6.98%, canceling out the gains from appreciation.

9. Baton Rouge

The state capital is both the second-largest metro area and second most expensive property market in all of Louisiana, behind only New Orleans. Property values went up by 7.56% from 2013 to 2017, not bad compared with other states, but weaker compared with most parts of Louisiana. Housing costs crept up, too, by 3.27% during this stretch.

The traffic in Baton Rouge isn’t great, with the average commute at 26.6 minutes, fourth-longest in the state. In terms of finding a job though, Baton Rouge is appealing. Its unemployment rate was just 6.7%, second-lowest in the state and better than all the other large cities. That helps make up for the slower gains in property values.

10. Morgan City

With unemployment at 8.5%, the Morgan City micro area has its share of economic problems. This has been a drag on property values, which only went up 6.7% from 2013 to 2017, one of the smallest increases in the state.

On the other hand, this does keep things affordable. The median property value is just $119,400, and housing costs fell by 3.18%, the best in the state. This is especially notable because in nearly every other part of Louisiana, costs have increased. Getting a job in Morgan City might be more difficult, but there is less strain on household budgets.

Homebuying tips for Louisiana

Thinking of moving to one of these Louisiana housing markets? These tips will help you through the process and find the best terms for your upcoming purchase.

Get your finances in order first

Before you start looking at homes, make sure your financial situation is in order. While good preparation makes sense everywhere, it’s especially important for a tight housing market like Louisiana’s with rising property values.

Consider applying for a mortgage preapproval before visiting properties. You’ll send the lender the same information as if you were formally applying for a home loan and with that, they can estimate how much you could likely borrow. Not only does this set your budget, but sellers will also take your offer more seriously knowing you’ll be able to get the financing.

To get the lowest interest rate on your mortgage, there are a couple ways to look better for lenders. These include paying off your current debts, saving as much as you can for a down payment and improving your credit score by making all your monthly debt payments and not applying for any other loans/credit cards during your housing search.

Using state programs

Louisiana runs several programs to help residents buy a new home. These programs have income limits and caps on the maximum property value, so they will not be a fit for everyone. But if you’re able to qualify, they offer some excellent benefits. A few of the programs include:

  • Market Rate GNMA Program — Offers a competitive interest rate for 30-year mortgages and helps cover the down payment and closing costs, up to 4% of the loan amount.
  • Mortgage Revenue Bond Program — Helps lower-income residents who don’t have the resources for a down payment. Covers closing costs and the down payment, worth up to 9% of the loan amount.
  • LHC Preferred Conventional Program — Assistance to cover the down payment and closing costs, up to 4% of your total loan. Can also lead to a more competitive interest rate and lower mortgage insurance costs.

For more information, rules and income restrictions, visit the Louisiana Housing Corporation’s website.

Protect your investment

While Louisiana has been great for homeowners over the past few years, this hasn’t always been the case. The aftermath of Hurricanes Katrina and Rita can still be felt in the market as Louisiana has the largest share of houses that are seriously “underwater,” meaning the mortgage is greater than the property value.

You should schedule a full property inspection before buying any home, especially if it’s an older home, to confirm that there is no hidden damage. Once you buy, make sure your house is fully insured. Regular homeowners insurance does not cover damage flooding. The Federal Emergency Management Agency (FEMA) encourages Louisiana residents to buy an extra flood insurance policy to cover this serious risk.

Where to find help

Our review can give you a great head start on where to look in Louisiana and how to get through the process. But it’s no substitute for professional expertise. Consider working with a local real estate agent or realtor to help with your search. They will have firsthand knowledge of the different neighborhoods and can guide you through the search, negotiations and closing paperwork.

To find a local professional, Louisiana Realtors recommends you search through realtor.com/realestateagents.

Housing prices in Louisiana are still affordable compared to other parts of the country, but if they continue their fast growth, that might not last for much longer. It’s smart that you’re doing this research and getting prepared now. By following these tips, you will be in great shape to find your new home in any of the Louisiana markets.

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 different 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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