Mortgage payments are finally coming down, meaning homebuyers sitting on the sidelines are getting ready to pounce.
The average interest rate on a 30-year mortgage fell to a four-month low last week, a welcome drop in borrowing costs for potential homebuyers grappling with the challenge of record high house prices and a shortage of housing on the market.
Despite the good news, a new report shows how being flexible on location can pay off this summer.
Experts have revealed where to buy the best ones and how to avoid making a purchase you’ll regret later.
Real estate gurus at Zillow, Insurance.com and the Missouri Economic Research and Information Center combined factors like value, insurance costs, cost of living, weather and supply to create the ultimate guide to where to buy across America in the coming months.
5 Best States to Buy Real Estate
Maryland
The average sales price of a home in Maryland is $421,000
According to the latest data, the average sales price of a home in Maryland is $421,000, slightly lower than the national average of $513,000.
“Even during the global financial crisis, house prices did not fall significantly and there were fewer foreclosures,” explains Kateryna Odarchenko of Long & Foster Real Estate.
The proximity to Washington DC also attracts affluent homebuyers who take advantage of increased flexibility in work arrangements, looking for affordable homes with more space.
“Washington, DC, has its own problems, which is why many people choose to live in Virginia or Maryland,” Odarchenko added.
In addition, Greenbelt, 30 miles from Baltimore, has plans for a new FBI headquarters, creating about 7,000 jobs.
Texas
The average cost to insure $400,000 of home value in Texas is $4,643 per year
Texas is on the list of the most desirable places to buy a home this summer, largely because the cost of living is lower than average.
“Texas continues to be a strong market for homebuyers due to its robust economic growth, favorable business climate and relatively affordable cost of living,” explains housing market expert Dennis Shirshikov.
“Cities like Austin and Dallas offer a combination of high-tech jobs and attractive living conditions,” he added.
However, the Lone Star State has one major drawback: the high cost of home insurance.
The average cost to insure a home worth $400,000 is $4,643 per year. In Maryland, it’s $2,131.
Nevada
‘Las Vegas offers opportunities for cash flow through rent and capital appreciation,’ argues one expert
“I would recommend looking at states with strong job growth and net migration, like Nevada,” real estate expert Daniel Cabrera said of the state.
“Home prices have been steadily rising” in Nevada, said Cabrera, who recommended the state as a specific target for real estate investment.
“Las Vegas offers opportunities for cash flow through leasing and capital appreciation,” he explained.
The average home price is now $440,000 and insurance is also still low, averaging $1,853 per year for $400,000 of coverage.
Arizona
The average home price in Arizona is currently $434,000
Arizona is seeing more interest from out-of-state homebuyers looking for affordable housing than states like nearby California.
The average home price is similar to Nevada, currently standing at $434,000.
However, home insurance premiums are significantly higher, averaging $3,063 per year for $400,000 in coverage.
North Carolina
Experts recommended North Carolina’s hot housing market this summer
North Carolina is considered a hot spot for potential buyers due to its relative affordability, with the average home price in the state being $335,000.
However, the state is increasingly being hit by environmental damage, such as hurricanes and coastal erosion.
“North Carolina, and particularly areas like Raleigh and Charlotte, offers a balanced mix of affordability, economic growth and quality of life,” Shirshikov said.
3 Worst States to Buy Real Estate
California
‘California continues to pose a challenge for home buyers due to exorbitant prices and high cost of living,’ says a real estate expert
While home insurance is relatively low, averaging $1,772 per year, the overall cost of living in the Golden State is sky-high.
House prices in particular are well above the national average at $786,000.
“California continues to be a challenge for home buyers due to exorbitant prices and high cost of living,” Shirshikov said.
‘In addition, the state’s strict regulations and high taxes make investing in real estate even more complicated.’
Florida
Florida often experiences natural disasters such as tornadoes
Although Florida home prices are more affordable than California and the cost of living is lower, experts say it is undesirable for potential buyers this summer.
“Although I am not licensed in the state, I currently consider Florida to be one of the least attractive states to buy real estate,” Odarchenko explains.
Addition: ‘During the COVID-19 period, there was an oversupply of real estate, while demand has fallen.’
New York
“New York is also a challenging market,” Shirshikov said of the Empire State Building.
‘The ongoing shift to working from home has led to a decline in demand for expensive urban living.
“In Manhattan, for example, residential real estate prices have fallen. High property taxes combined with the high cost of living make it a less attractive option for many buyers,” he explained.
Like California, average home prices in New York are significantly higher than the national average, at $742,000.