(The Center Square) – Houses are much more affordable in Iowa than in most of the country, though barriers still exist that make that goal less feasible for many Americans.
The Common Sense Institute (CSI) Iowa released a new report addressing housing affordability in Iowa. While it was found that Iowa is one of the most affordable states in which to buy a home, issues like high property taxes and housing shortages complicate the issue.
For example, the report found that Iowa ranks seventh in the country in housing affordability based on mortgage costs alone. However, the state increased to ninth when accounting for property taxes ($1,303.15 monthly), CSI said in its report.
Additionally, the report said Iowans only have to work 37 hours per month to afford a mortgage on a newly purchased home, which is 12 hours fewer than the national average.
However, home prices have increased substantially this decade. Single-family homes in Iowa are up by about 40% since 2020, meaning it is becoming increasingly difficult for first-time home buyers to make a purchase. That increase trails the national average (48%), the report said.
Even so, the state’s housing shortage is improving, the report said.
“With current permitting rates, Iowa is projected to close its housing deficit within the next five years, though shortages remain significant in areas like Pottawattamie and Polk counties,” the report said.
Ben Murrey, Director of Policy and Research at CSI Iowa, said the study’s results are encouraging, even if Iowa has room for improvement.
“Our research shows that Iowa remains one of the most affordable states for homeownership, but the market has definitely become more challenging since the pandemic, especially to first-time homebuyers attempting to enter the market,” Murrey said in the release. “Reducing property taxes and increasing housing supply are the two main levers we can pull at the state level to improve affordability.”
Gavin Blair, CEO of the Iowa Association of Realtors, agreed that the report indicates that Iowa needs lower property taxes.
“We see firsthand the challenges Iowans face in finding affordable homes,” Blair said in the release. “This report reinforces why it’s crucial to keep housing within reach—not only to support first-time homebuyers but to sustain vibrant, growing communities across the state. By addressing supply and reducing tax burdens, we can ensure that more families have the opportunity to own a home and build their future here in Iowa.”
