As Pricey as a Big City: Home Values in America’s Most Expensive Towns
Why use LendingTree?
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 look at how costly buying a house in a town can get, LendingTree analyzed U.S. Census Bureau American Community Survey data to find the 50 U.S. micropolitan areas — which we refer to in this study as “towns” — with populations between 10,000 and 50,000 that had the most expensive median home values.
Many towns across the country are chock-full of expensive real estate, with home values that rival — and, in some cases, exceed — those found in major metropolitan areas.
Key findings
- In raw dollars, Vineyard Haven, Mass., Jackson, Wyo., and Breckenridge, Colo., are the towns with the most expensive real estate in the U.S. The median home values in these towns are $857,600, $670,100 and $641,900, respectively. This means that a median-value home in Vineyard Haven is valued in the same ballpark as one in San Francisco ($933,300), and that median-value homes in Jackson and Breckenridge are worth about as much as those in Los Angeles ($671,700) and San Diego ($627,200).
- Relative to income, homes in Vineyard Haven, Jackson and Hailey, Idaho, are the most expensive. In these areas, median home values are an average of 8.57 times higher than the median area household incomes. This suggests that many full-time residents in these towns would have to stretch their budgets to buy a house.
- Of the towns in our study, homes are the least expensive relative to income in Evanston, Wyo., Los Alamos, N.M., and Rock Springs, Wyo. The median home value in these areas is an average of 2.72 times higher than the median area household income, which implies that homes in each town are relatively affordable. This is especially true in Los Alamos — even though the median home price there is higher than in most other towns, the median household income is more than $123,000 a year.
Towns where home values are the highest
No. 1: Vineyard Haven, Mass.
- Total population: 20,277
- Median household income: $77,392
- Median home value: $857,600
- Home value-to-income ratio: 11.08
- Metro with comparable median home value: San Francisco
- Median home value — comparable metro: $933,300
- Median household income — comparable metro: $118,547
- Home value-to-income ratio — comparable metro: 7.87
No. 2: Jackson, Wyo.
- Total population: 34,809
- Median household income: $87,143
- Median home value: $670,100
- Home value-to-income ratio: 7.69
- Metro with comparable median home value: Los Angeles
- Median home value — comparable metro: $671,700
- Median household income — comparable metro: $81,652
- Home value-to-income ratio — comparable metro: 8.23
No. 3: Breckenridge, Colo.
- Total population: 31,042
- Median household income: $93,505
- Median home value: $641,900
- Home value-to-income ratio: 6.86
- Metro with comparable median home value: San Diego
- Median home value — comparable metro: $627,200
- Median household income — comparable metro: $88,240
- Home value-to-income ratio — comparable metro: 7.11
Why are homes in some towns so expensive?
As our study shows, there are many towns where home values are as expensive — if not more costly — as those in the country’s largest metros. While this may seem counterintuitive at first glance, various reasons explain it.
The nation’s most expensive towns are often popular vacation spots for affluent individuals who might not make their money locally and can afford to spend significant sums on homes. These types of buyers can buy up a town’s limited housing supply and drive up home prices in doing so, making housing difficult to afford for locals who aren’t 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 considered not profitable enough to be worthwhile for builders. This means 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 lower your monthly payment and save you a significant amount of money over the lifetime of your loan. With a lower rate, a home that once seemed too expensive could become more affordable.
- Work on your credit score: Though you don’t need a perfect credit score to get approved for a mortgage, the higher your score is, the higher your chances of approval are. In the same way that shopping around for a mortgage can help you secure a lower mortgage rate and make your loan more affordable, so too can strengthening your credit score before you apply for a mortgage.
- 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 qualify for loans with relatively low mortgage rates and zero-dollar down payments.
Methodology
The data in this study comes from the U.S. Census Bureau 2021 American Community Survey (with five-year estimates). For this analysis, LendingTree used micropolitan-level data for areas with populations 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.