Home Prices in America’s Most Expensive Towns Are Nearly As Expensive As They Are in the Nation’s Largest Metros

The town-and-country lifestyle is often depicted as simple, idyllic and inexpensive compared to big-city living — especially when it comes to housing costs. But is this accurate?

To take a look at how costly buying a house in a town can get, LendingTree used U.S. Census Bureau data to find the 50 U.S. towns with populations between 10,000 and 50,000 that had the most expensive median home values.

Researchers found that many towns across the country are chock-full of expensive real estate, with prices that rival — and, in some cases, exceed — those found in major metropolitan areas.

Key findings

• In raw dollars, Vineyard Haven, Mass., Breckenridge, Colo., and Jackson, Wyo., are the most expensive towns in the U.S. The median home prices in these towns are $699,500, $579,600 and $549,800, respectively. This means that a median-priced home in Vineyard Haven costs more than one in Los Angeles ($613,400), and that median-priced homes in Breckenridge and Jackson cost about as much as one in San Diego ($563,700).
• Relative to income, homes in Vineyard Haven, Hailey, Idaho, and Breckenridge are the most expensive. In these areas, the median home price is an average of 8.19 times higher than the median area household income. This suggests that homebuyers in these towns have to stretch their budgets to buy a home.
• Of the towns in LendingTree’s study, homes are the least expensive relative to income in Los Alamos, N.M., Pierre, S.D., and Winnemucca, Nev. The median home price in these areas is an average 2.61 times higher than the median area household income, suggesting that homes in each town are relatively affordable. This is especially true in Los Alamos, where even though the median home price is higher than in most other towns, the median household income is more than $120,000 a year.
• On average, buying a home in one of the nation’s 50 most expensive towns is almost as expensive as buying a home in one of the nation’s 50 largest metros. The average of the median home prices across the towns in LendingTree’s study is $268,258. In the nation’s largest metros, the average of the median home prices is $286,046.
• Although America’s most expensive towns are sometimes more expensive than its largest metros, people who live in towns tend to earn less income than they do in metros. The median household income across the nation’s most expensive towns averages $61,122, nearly $9,000 less than the average median household income across the nation’s 50 largest metros.

Towns where home prices are the highest

No. 1: Vineyard Haven, Mass.

• Total population: 17,312
• Median household income: $71,811
• Median home value: $699,500
• Home value-to-income ratio: 9.74
• Metro with comparable median home value: Los Angeles
• Median home value — comparable metro: $613,400
• Home value-to-income ratio — comparable metro: 8.40

No. 2: Breckenridge, Colo.

• Total population: 30,649
• Median household income: $79,277
• Median home value: $579,600
• Home value-to-income ratio: 7.31
• Metro with comparable median home value: San Diego
• Median home value — comparable metro: $563,700
• Home value-to-income ratio — comparable metro: 7.14

No. 3: Jackson, Wyo.

• Total population: 34,706
• Median household income: $81,427
• Median home value: $549,800
• Home value-to-income ratio: 6.75
• Metro with comparable median home value: San Diego
• Median home value — comparable metro: $563,700
• Home value-to-income ratio — comparable metro: 7.14

Why are homes in some towns so expensive?

As LendingTree’s study shows, there are many towns where home prices are as expensive, if not more costly, than home prices in the country’s largest metropolitan areas. And while this may seem counterintuitive at first glance, there are various reasons why this is the case.

Generally speaking, the nation’s most expensive towns tend to be popular vacation spots for affluent individuals who often don’t make their money locally and who can afford to spend significant sums of money on homes. These types of buyers drive up home prices and make housing difficult to afford for locals who are not high income earners.

Even in areas that aren’t prominent vacation spots, home prices can still be expensive due to a lack of housing supply. Rural areas often see a significant lack of housing development because construction is prohibitively costly and often not profitable enough to be worthwhile for builders. This means that buyers in many towns have to compete for a relatively small number of homes, which puts upward pressure on prices.

3 tips for town homebuyers

Though towns can be expensive, there are still ways for homebuyers to make housing more affordable. Here are three tips.

• Shop around for a mortgage before buying. Shopping around for a mortgage can help you find your best possible mortgage rate, which can end up lowering your monthly payment and saving you a significant amount of money over the lifetime of the loan. With a lower rate, a home that once seemed too expensive could become more affordable.
• Consider different loan types. Many loan programs can help make homeownership a more achievable goal, especially for buyers with lower incomes. For example, loans backed by the U.S. Department of Agriculture (USDA) can help buyers in eligible rural areas avoid making a down payment on a home and get a low mortgage rate.
• Ask the seller to cover your closing costs. Sellers — especially those who are highly motivated to move — are sometimes willing to cover part, or all, of the closing costs you owe when purchasing a home. Because closing costs can add up to several thousand dollars, getting the seller to pay them can be a good way to save money and make the home you’re looking to buy more affordable.

Methodology

The data used in this study comes from the U.S. Census Bureau’s 2019 American Community Survey (five-year estimates). For this analysis, LendingTree used micropolitan-level data for areas with a population of between 10,000 and 50,000 to approximate town-level data.

The home value-to-income ratio was calculated for each town and metro by dividing an area’s median home value by its median household income. The larger the ratio, the more expensive homes are relative to an area’s median income.