Learn more about the housing market in North Dakota

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.  

In this article, we’ll cover everything you need to know about the North Dakota housing market in 2024. 

North Dakota Housing Market Overview 

North Dakota is a midwestern state home to 63 wildlife refuges, more than any other state. It’s a place dominated by open lands and agriculture. It also boasts one of the lowest unemployment rates in the country at 2%. 

From a housing market standpoint, North Dakota maintains general economic stability, some growth, and modest appreciation throughout the year. It’s an affordable place to live when compared to most of the United States, but the harsh winters make it less appealing than many other destinations. 

Like many other states, this housing market is currently struggling with scarce inventory. While there are some new listings, there aren’t enough homes available to meet buyer demand. Conditions are ripe for a competitive seller’s market: Low inventory, high demand, and high prices. Fewer homes are selling due to apprehension around high interest rates, leading to hesitancy in the market. 

North Dakota Housing Market Trends 

To understand the housing market in North Dakota, it’s important to keep up with trends. Let’s look at some key ones in North Dakota: 

Note: The median home price statistics are based on Zillow’s recent data, and the rest of the data is based on a recent Realtor data set, unless otherwise stated. 

Median Home Price 

The median sale price for homes in North Dakota is $265,189, according to Zillow’s data from April 30, 2024. Even though its home prices aren’t in the top ten (in the U.S.) in terms of affordability, North Dakota’s cost of living is extremely low in America, which makes the home prices more reasonable. 

Number of Homes Sold in March 2024 

333 homes were sold in North Dakota in March of 2024. This is down 11.9% from March last year, according to the Realtor data set. This metric gives us a good picture of the current sales volume in North Dakota.  

However, keep in mind that this number might be inflated compared to other months since nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The median DOM in North Dakota was 44 days in May of 2024. This means homes in North Dakota take over month on average to sell, which would point to more of a buyers’ market (based on this indicator alone). 

New Listing Statistics 

The new listing count in ND continues to decline. The 928 homes for May of 2024 are 17.58% lower than the month before and 6.26% lower than last year. As mentioned earlier, housing inventory scarcity is an issue in this state. 

Property Tax Rate 

The average property tax rate in North Dakota is 0.98%, according to Rocket Mortgage. This places North Dakota’s average property tax rate near the middle of the pack in the U.S. However, keep in mind that property taxes vary widely depending on the specific county of North Dakota and the value of the home. 

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 4,004 homes in North Dakota experienced a foreclosure filing (according to recent data from ATTOM). Based on this data, North Dakota’s foreclosure rate is one of the lowest in the country. 

Hottest Local Markets in North Dakota 

North Dakota has several reliable markets worth looking into for investors and/or homebuyers. Here are a few examples: 

1. Fargo

Hawthorne, Bennett, and Horace Mann are some of the most popular neighborhoods for investors.  According to Rocket Homes, the median home price in ND is $281,355, and houses are selling for 0.6% more, on average, than they were last year. The housing supply saw an increase of 13.1% from April to May of 2024. There was also a 7% increase in homes sold from April to May of 2024.

2. Bismarck

The capital of ND has a healthy and diverse economy. Specifically, regarding housing, this buyers’ market has a DOM of 48 days and a median sale price of $299,900 (down 6.3% year-over-year), per Redfin. The 103 homes sold, though, was an almost 40% increase year-over-year. The average house in Bismarck sells almost exactly at the list price.

3. Grand Forks

Due mostly to its proximity to the University of North Dakota, this city offers a lot of demand for rentals. The stable economy bodes well for investors alike. Grand Forks median sale price is 37% below the national average at $275,000, which is still up almost 26% year-over-year. With a DOM of 38.5 days, Grand Forks is one of the quicker areas for home sales in North Dakota.

Economic Factors Impacting the North Dakota Housing Market 

A holistic view of North Dakota’s housing market requires a basic understanding of the main economic drivers affecting the market. The cost of living is substantially lower in North Dakota than the national average. According to this study, North Dakota was the most affordable state in America as of early 2023.  

Mortgage Rates 

High mortgage rates are a continuing challenge for would-be homeowners in the U.S. North Dakota’s average rates for 30-year mortgages in June of 2024 are only slightly lower than the national average at 6.38%, which is below the national average. Higher interest rates deter borrowing and discourage those who already own homes from putting their homes on the market. Many homeowners around the country report feeling “locked in” to their current homes, as it is unlikely they will secure a mortgage rate as low as their current one on their next property. Prospective buyers in North Dakota should monitor mortgage rates in the coming months for a better understanding of how they impact the housing market. 

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in North Dakota. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

However, as mentioned earlier, North Dakota has an extremely low cost of living compared to the rest of the U.S. Thus, this doesn’t pose as great of a problem here because of the low prices on groceries, utilities, gas, and housing. 

Population Changes and Demographics 

North Dakota’s population grew 11 out of the 12 years between 2010 and 2022. ND has the highest rate of employed working-age people (16- to 64-year-olds) of any state in the U.S.  

Utilities 

All the states with the most reasonable utility prices border Canada. The proximity to mountains is a big part of these prices because it allows widespread use of solar, wind, hydro, and geothermal energy. 

North Dakota Housing Market Predictions 

Most experts believe North Dakota’s median home price will continue to increase slightly, especially because of the aforementioned low inventory. That said, North Dakota offers affordable housing compared to most other states and that seems unlikely to change anytime soon.  

It also appears likely that buyers will increase in the market as well. People are on the hunt for deals and North Dakota should continue to have a low median home sale price.  

Likelihood of North Dakota Housing Market Crash  

Experts don’t see concerning signs of a market crash in North Dakota on the horizon. The healthy economy, strong job market, and affordability are the main elements keeping any concerns at bay.  

Forecast for The U.S. Housing Market 

Now that we’ve looked at the housing market in North Dakota, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years? 

The United States’s current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9. 

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.  

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get. 

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth. 

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.  

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

North Dakota Rental Market 

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.  

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.  

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year. 

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

North Dakota, while impacted by all these factors, is a very affordable place to rent. Here are some key trends below from Zillow: 

North Dakota Rental Market Key Trends

• Median rent: $995 

• Month-over-month rent change: $10 

• Year-over-year rent change: +$95 

• Available rentals: 869 

Conclusion 

The North Dakota housing market in 2024 is marked by a blend of stability, low inventory, and slow growth, making it crucial for potential buyers and sellers to stay informed about market trends. Whether you’re looking to purchase a home soon or sell your property in North Dakota, the macro- and micro- economic trends outlined above will affect your decision-making. Market dynamics like changes in home prices, inventory levels, and interest rates will continue to be critical for stakeholders in North Dakota real estate.