In a housing market defined by extremes, one region is emerging as the quiet frontrunner: the Midwest.

For years, the Midwest offered what other major U.S. markets couldn’t: affordability, stability, and livability. But now, the secret’s out. According to SmartAsset’s analysis of Zillow data, five of the country’s fastest-growing rental markets are in the Midwest, and home values are rising at a faster clip than most coastal cities. The region’s longtime affordability is rapidly narrowing, and for investors, developers, and asset managers, that signals both opportunity and urgency.

Rent Growth in the Midwest: No Longer Flat, and Far From Forgotten

Zillow’s latest rent index shows Cleveland, Ohio saw a 7.3% annual increase in rents, making it the second-fastest growing rental market in the country. Other Midwest cities like Fort Wayne, Indiana and Milwaukee, Wisconsin followed closely behind with rent growth exceeding 6%.

Even in markets that were once considered under the radar, demand is booming. In Milwaukee, occupancy sits at 94%, and the market now reports eight renters competing for every available unit - one of the most competitive leasing environments in the U.S.

Top 5 Cities With Fastest-Rising Rents:

1. Newark, NJ
2. Cleveland, OH
3. Columbia, SC
4. Fort Wayne, IN
5. Milwaukee, WI

(Source: Zillow via Boardroom)

Home Prices Are Climbing, Too

This surge in demand isn’t limited to renters. Midwest cities are also seeing some of the sharpest home price appreciation in the nation. According to S&P Dow Jones Indices and CoreLogic, Cleveland (+5.17%), Detroit (+5.48%), and Chicago (+6.02%) are all among the top markets for 1-year price growth. New York may have led with a 7.92% spike, but the Midwest makes a strong showing—highlighting a fundamental shift in migration patterns and investment appetite.

In fact, CNBC recently reported that the Midwest is home to five of the top 10 most in-demand ZIP codes for home sales nationwide, per Redfin data.

Why It’s Happening

Several converging factors are behind this regional rise:

• Cost Advantages: The Midwest still boasts lower property taxes and insurance premiums compared to coastal metros. That’s attracting both individual renters and institutional capital looking for yield.
• Supply Constraints: New construction has lagged behind population growth in many markets. In some areas, it’s not just that prices are rising, it’s that there simply aren’t enough units available.
• Remote Work’s Legacy: As hybrid work models persist, more people are choosing lifestyle affordability over urban prestige, relocating to cities like Columbus, Cleveland, and Grand Rapids for better quality of life and lower cost of living.
• Institutional Confidence: From private equity to family offices, more capital is flowing into Midwest multifamily and single-family rental portfolios. The numbers are just too compelling to ignore.

What This Means for Stakeholders

For investors: The opportunity lies in timing. The Midwest remains undervalued relative to fundamentals, but that window is closing. Long-term demand drivers are now baked into the market.

For policymakers and developers: This is the moment to respond with smart housing policy and accelerated construction. A reactive stance will only widen the affordability gap that drew people to the region in the first place.

For residents: Rising prices signal growing equity, but also new challenges. Maintaining affordability and inclusivity must remain top of mind as growth continues.

Our Take

We’ve believed in the Midwest from the beginning, not just as a value play, but as a region with real staying power. These numbers confirm what we’ve seen on the ground: momentum is building, and the fundamentals are shifting.

We’re not chasing trends. We’re building long-term, community-rooted investments in markets where demand is durable, and impact is measurable.

Now is the time to lean in.

Sources:

• S&P Dow Jones Indices & CoreLogic (via Yahoo Finance)
• Zillow Rental Data (via Boardroom)
• CNBC (https://www.cnbc.com/2024/07/12/the-midwest-housing-market-is-hot-again.html)
• SmartAsset.com
• Redfin ZIP Code Demand Rankings