Momentum in the Midwest! Here’s Why It’s the New Hotspot for Real Estate Investors
The Midwest real estate market has never been stronger for real estate investment.
The US Midwest is emerging as a thriving region for residential and commercial real estate. Low house prices, high demand, and a burgeoning economy are driving market growth. For real estate investors, the Midwest offers a high-potential investment that, with a robust investment plan, will generate strong wealth appreciation.
An active and affordable market
Across the Midwest, housing prices remain significantly lower than the national average, particularly when compared to coastal markets. The median home price in the Midwest was approximately $280,000, compared to $550,000 in the West. Even in some of the region’s largest cities, prices remained at only 50-60% of the US average.
Additional market trends are also lending strength to the region. The Midwest fully rebounded from the economic downturn during the pandemic by mid-2024. Other markets are still feeling the repercussions. Ohio, in particular, now boasts a thriving job market and rising employment, characterized by increasing market activity and demand from both businesses and residents.
Business influx is driving demand
The Midwest is currently experiencing strong growth in industry and commerce. The central location and affordability of the market are attracting large employers across healthcare, manufacturing, finance, and technology, creating new jobs and population influx.
The population is becoming younger and more diverse, primarily driven by immigration of the working demographic. Notably, the Midwest was the only region that saw an increase of 20-34 year-olds in 2024, the largest renter cohort. With strong employment opportunities and a cost of living almost 15% lower than the US average, the Midwest is an attractive region for individuals seeking rental properties.
High yields and low vacancies
The rental market is enjoying exceptional yields across the Midwest. In some Midwestern cities, such as Detroit, rental yields have exceeded 20% in recent years, and the region experienced the highest rent growth of +5.3% in 2024. The market has continued to grow, with average rent reaching approximately $1,500 in early 2025, representing a nearly 16% year-over-year increase.
Additionally, rental vacancy rates in the Midwest are low and continue to decline, demonstrating the high demand for properties in the region. A low turnover means steady cash flow for landlords with predictable income streams, making it an attractive investment option.
Optimize on opportunity
The economic diversification, increased demand, and strengthening infrastructure in the Midwest present a strong investment opportunity. With a smart investment strategy, both institutional investors and small, first-time investors could be set to reap rewards.
At Gilberti Group, we recommend targeting markets with value-add projects in growth corridors and ensuring robust deal source networking with financial discipline to yield higher, risk-adjusted returns.
If you’re interested in exploring Midwest investment opportunities, we invite you to connect with our team to find out more.
