Des Moines Leads Nation in Homebuilding and Affordability, But New Homes Still Carry a Premium
A recent analysis highlights Des Moines, Iowa, as the top city for housing construction and affordability, though experts note a significant price difference between new and existing homes.
Des Moines, Iowa, has been recognized as the nation's leading city for new home construction and affordability, according to a Realtor.com analysis of the 100 largest U.S. metropolitan areas. The Iowa capital received an A+ grade, surpassing other cities due to its accessible housing market.
Housing Market Dynamics
The city's advantage stems from a high permit-to-population ratio of 1.85, indicating that it issues permits for new home construction at a rate significantly higher than expected based on its population and national trends. This robust construction activity helps to bolster the housing supply. For a median earner making $86,600 annually, monthly home payments in Des Moines account for approximately 27.5 percent of their income, assuming they purchase a median-priced home valued at $349,903.
However, experts caution that while overall affordability is strong, the premium on newly constructed homes presents a challenge for some buyers. Real estate expert Andrew Te notes that the price of homes when they hit the market is the most critical factor for affordability. Data indicates that new homes in Des Moines command a 23.4 percent premium over existing homes, placing the metro area in the lower half of markets for this specific metric. This premium makes new construction less attainable for lower- and middle-income families.
Mitch Coluzzi, head of construction at SoldFast, stated that new homes in Des Moines typically start above $320,000, with very few options available below $250,000. He also pointed out that despite its relative affordability compared to other metros, Des Moines has experienced a slowdown in growth in recent years, partly due to Iowa's perception as a less dynamic state, which can help keep prices lower but also limits future expansion.
Broader Context
Realtor.com chief economist Danielle Hale emphasized the inseparable link between homebuilding and affordability. She stated that sustained improvement in affordability requires a balanced approach of both supply and accessibility, with Des Moines and Raleigh, North Carolina, serving as distinct examples of this principle.
Raleigh, North Carolina, secured the second position in the ranking, featuring a permit-to-population ratio of 2.61 and a negative new-construction premium.
Beyond its housing market, Des Moines is known for hosting the Iowa State Fair, one of the country's oldest and largest agricultural expositions. The city also attracts national attention every four years as the site of the Iowa presidential caucuses. Additionally, it is scheduled to host the USA Gymnastics Championships next year and the USA Triathlon Nationals in 2027 and 2028.