Learn more about the housing market in Iowa

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.  

Key Takeaways

1. Iowa’s housing market in 2026 remains stable but supply-constrained, with inventory improving modestly yet still below fully balanced levels.
2. Home prices continue to rise at a slower pace, supported by steady demand and Iowa’s relatively strong affordability compared to national averages.
3. Mortgage rates have eased into the mid-6% range, improving affordability slightly but still limiting mobility for some buyers and sellers.
4. Urban and suburban areas continue to see the strongest demand, while Iowa’s low crime rates and steady job market support long-term housing stability.

Iowa Housing Market Overview 

Iowa’s housing market continues to reflect tight inventory and steady price pressure heading into 2026, though conditions have improved from the most constrained years. New listings rose meaningfully through 2024 and 2025, helping ease supply shortages, but inventory in many areas remains below levels considered fully balanced, which continues to support home values.

Economic fundamentals remain supportive. Iowa’s low unemployment rate and stable job growth have sustained buyer demand, even as higher mortgage rates limited activity earlier in the cycle. As borrowing costs stabilized and pent-up demand worked through the market, sales activity has become more measured rather than overheated.

Despite ongoing inventory constraints, Iowa remains one of the more affordable housing markets in the U.S., with home prices well below national medians. This relative affordability continues to attract buyers and supports a resilient, stable market as the state moves through 2026.

Iowa Housing Market Trends 

To understand the Iowa real estate market, it’s important to keep up with trends. Let’s look at some key ones in IA: 

Note: These statistics are based on Redfin’s monthly housing data from November 2025. 

Median Home Price 

Iowa’s median home price is $244,600, according to Redfin’s monthly housing market data from April 2024. This is a growth of about 5.2% since November of last year, and the number of homes sold was down 8.1% year over year and there were 2,815 homes sold in November this year.

Number of Homes Sold in November 2025

In November, there were 2,815 homes sold in Iowa, down 8.1% from the previous year according to the Redfin dataset. Thus, even though Iowa’s market has some issues, selling and buying are occurring at a solid rate. However, it’s important to keep in mind that this number might be less inflated compared to other months since nationally speaking, sales usually peak during the spring and summer months and slow considerably 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 the average length of time a home remains listed on the market before being put under contract. A lower DOM signals an extremely competitive seller’s market with more pressure on buyers to come in with higher offers and remove contingencies. A higher DOM signals a buyer's market with slower sales and less leverage for sellers. 

The current median DOM in Iowa is 45 days. This is average, so Iowa is more in the middle when it comes to this metric. Iowa’s DOM is another indicator that the market is somewhat solid for everyone overall.  

New Supply Statistics 

Housing supply remains a key constraint in Iowa heading into 2026. While the state remains more affordable than many markets, inventory growth has lagged demand, and higher mortgage rates since 2022 continue to limit both buyer activity and seller mobility. Construction and permit data also suggest that new housing has not fully kept pace with long-term population and household needs, even though Iowa’s imbalance is less severe than in faster-growing states.

Supply conditions have improved modestly since 2024, but not enough to fully rebalance the market. As a result, prices have stabilized rather than fallen, and competition persists in many metros. Analysts expect gradual normalization rather than a sharp correction, with meaningful relief dependent on sustained construction activity and continued rate stability.

Property Tax Rate 

The average property tax rate in Iowa is 1.52%, according to Rocket Mortgage. This places Iowa’s average property tax rate as the 10th highest in the United States (includes District of Columbia). It’s important to point out that property taxes vary widely depending on the specific county of Iowa and the value of the home, so this average rate may or may not be indicative of your situation. 

Foreclosure Rate in October of 2025

In October 2025, 1 in every 3,222 homes experienced a foreclosure filing (according to recent data from ATTOM). Based on this data, Iowa’s foreclosure rate is the 7th highest in the country. 

Hottest Local Markets in Iowa 

Iowa has several noteworthy markets. Here are three of the most noteworthy: 

1. Des Moines

The capital of Iowa is one of the fastest growing areas in the Midwest with strong financial prospects and improving city services. A diverse economy continues to multiply with robust sectors like insurance, healthcare, and tech supporting a stable ecosystem.  

The housing market Iowa is home to is extremely competitive with houses selling in 14 days on average. The median sale price was $215,000, up almost 3.9% from last year.  

2. Cedar Rapids

The largest corn-processing city in the world is a vibrant manufacturing hub. It’s a fairly competitive housing market. The median sales price for homes was $188,000 in November. The Median Days on Market is 23, which is up by one from last year.  

3. Council Bluffs

Council Bluffs continues to stand out as a buyer-leaning market heading into 2026. After being recognized in recent national rankings as a strong market for first-time homebuyers, the city has maintained relatively higher inventory levels than much of the state, helping keep conditions more balanced. Homes typically spend just over three weeks on the market, signaling steady demand without the extreme competition seen elsewhere.

Factors Impacting the Iowa Housing Market 

Iowa’s market is influenced by macroeconomic trends and more granular economic factors specific to the state. 

Mortgage Rates 

Mortgage rates remain a major factor shaping Iowa’s housing market heading into 2026. After peaking near 7–8% in 2023 and early 2024, average 30-year fixed mortgage rates have eased into the mid-6% range, closer to the national average. While this improvement has slightly boosted affordability, rates remain high enough to deter some buyers and keep many current homeowners rate-locked, limiting new listings. Buyers in Iowa should continue monitoring mortgage rate trends closely, as modest declines could meaningfully improve affordability and increase inventory.

Inflation and Cost of Living 

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

Population Changes and Demographics 

Iowa’s population continues to concentrate in urban and suburban areas while many rural counties see long-term decline. Census data show that urban population growth has driven most of the state’s net gains, with metro-adjacent counties accounting for the majority of household growth over the past decade. This shift has intensified housing demand in cities and regional hubs, even as rural housing stock remains underutilized.

Long-Term Projection 

While Iowa’s housing market remains challenging for buyers in the short term due to limited inventory and elevated borrowing costs, the long-term outlook remains favorable. Iowa continues to benefit from steady economic conditions, low unemployment, and comparatively affordable home prices, which support sustained housing demand. As mortgage rates stabilize and inventory gradually improves, buyers and investors may find more favorable entry points over the next market cycle, rather than immediate relief.

Iowa’s appeal is also reinforced by its consistently low crime rates, ranking among the safest states in the country. Combined with stable economic fundamentals and lower living costs than most U.S. states, these factors position Iowa as an attractive long-term housing market for residents and investors alike.

Likelihood of Iowa Housing Market Crash  

Most experts don’t see a crash anytime soon for the IA housing market in 2026. As supply continues to increase and interest rates decline, the market should stabilize a bit. Additionally, the market isn’t showing major signs that should cause undue concern. 

The affordability of housing compared to the rest of the nation also bodes well for the future. Tradingpedia created a map showing home affordability with personal income as a percentage of median home price (the higher the percentage, the more affordable the state), and Iowa came in at 27.61%. Comparing this to somewhere like California (10.56%) gives you an idea of how affordable Iowa is. This isn’t a market that looks to be in danger for the foreseeable future. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at Iowa’s housing market, 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' current median existing-home sale price is around $415,200 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 3 months, keeping conditions constrained.

We’re currently in a seller’s market with buyers looking at continued rising house prices—although they are rising at a slower pace compared to previous years.. 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 2026, he predicts that existing home sales will rise an additional 13%. Yun expects mortgage rates to stabilize at the lower end of the current 6-7% range through 2025 and 2026 as the Federal Reserve continues gradual rate cuts. There's an anticipation of a more balanced market in the coming years, with moderate price growth and a greater amount of Americans re-entering the market.

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. Year-to-date single-family housing starts were down about 7.1% in 2025, whereas starts for buildings with five or more units were up roughly 14.5% 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. According to the National Association of Home Builders, approximately 74.9% of U.S. households were unable to afford a newly built median-priced home in 2025. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.

Iowa Housing Market Forecast 

As Iowa moves through 2026, inventory has increased modestly and buyer activity has improved with seasonal demand and more stable mortgage rates. Warmer months continue to bring buyers back into the market, and easing rate volatility has reduced some uncertainty, though affordability pressures remain tied to overall supply constraints.

Despite these improvements, most Iowa realtors still stop short of calling the market fully stable. Some analysts caution that rate declines can quickly reignite price growth, limiting buyer gains. Financial analysts have suggested that buyers who can wait may benefit from more competitive mortgage rates over the next year, even if prices remain firm.

Importantly, Iowa remains one of the most affordable housing markets in the U.S. when home prices are measured against median household income. This relative affordability continues to make the state attractive for both first-time buyers and long-term residents, even amid near-term market uncertainty.

Iowa’s current rental market is influenced by these trends, but not dominated by them. Iowa is a very affordable state, in terms of rentals. Below are just a few of the current trends for Iowa’s rental market based on data pulled from Zillow: 

Iowa Rental Market Key Trends 

• Median rent: $1,100

• Month-over-month rent change: -$25

• Year-over-year rent change: $0 

• Available rentals: 4,834 

The Iowa rental market, like the housing market, is known for affordability. Even though the state had one of the largest recent rent increases in the nation, its prices are still lower than most other states. A lack of new construction is one of the main reasons rent prices continue to climb all over the U.S. Iowa, however, still has the fourth lowest median rent prices in America. 

It’s wise to keep an eye on Midwest rental prices in the coming years. This area is one of the main drivers behind the continued increase in rents.  

Conclusion 

The Iowa housing market in 2026 reflects a mix of stabilization and ongoing challenges, making it important for buyers and sellers to closely follow local trends. Inventory has improved modestly and price growth has slowed, but affordability remains influenced by mortgage rates and lingering supply constraints. Changes in home prices, available listings, and borrowing costs will continue to shape decision-making for anyone buying or selling real estate in Iowa.

FAQs

Is Iowa a buyer’s or seller’s market in 2026

Iowa leans closer to a balanced market, though many areas still favor sellers due to limited inventory. Buyers face less competition than in recent years, but desirable homes continue to move quickly in metro areas.

Are home prices in Iowa expected to fall

Most forecasts do not expect a significant price decline. Instead, prices are likely to stabilize or grow modestly as supply improves gradually and demand remains steady.

How affordable is Iowa compared to other states

Iowa remains one of the more affordable housing markets in the U.S. Home prices and rents are well below national medians, especially when compared to household income.

What role do mortgage rates play in Iowa’s market

Mortgage rates remain a key constraint. While rates have fallen from recent highs, they are still elevated enough to limit some buyer activity and keep homeowners rate-locked, which restricts inventory growth.

Where is housing demand strongest in Iowa

Demand is strongest in urban and suburban markets such as Des Moines, Cedar Rapids, and surrounding metro areas, where job growth and population concentration continue to drive competition.