8 Affordable Housing Markets That are Likely to Boom Soon
Summary
This article highlights affordable housing markets, many of which are experiencing significant price appreciation, potentially offering strong investment opportunities for STR hosts. While interest rates are not expected to change much, investors with cash may be able to cash flow rentals, even as overall appreciation might be less than in post-pandemic years. Focus on buying well and playing the long game.
Key Insights
- •Home prices increased in 77% of metros in the third quarter of 2025, and are still rising, but home sales have struggled to gain traction.
- •The NAR foresees a modest 4% uptick in home prices in 2026.
- •Interest rates are not expected to change much, and the 30-year fixed is expected to be around 5.9% (Fannie Mae) or 6.4% (MBA) by late 2026.
- •Investors in some small cities have seen their net worth skyrocket since 2019, with some areas experiencing up to 86% appreciation.
Action Items
- ✓For investors who plan to buy with mortgages, practice careful buying and meticulous management, and knuckle down for the long term.Effort: mediumImpact: medium
Tools & Resources
- →Realtor.com Top 10 Cities Where Home Values Have Boomed report: Analysis from Realtor.com in its Top 10 Cities Where Home Values Have Boomed report.
- →National Association of Realtors (NAR) latest quarterly report: According to the National Association of Realtors (NAR) latest quarterly report.
- →Zillow: Using data from Zillow, Fortune found that half the country actually saw values decline at some point last year.
Watch Out For
- ⚠Prospective landlords who plan to buy with mortgages will not see a sudden surge in cash flow.
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