Learn more about the housing market in Kansas

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.  

Kansas Housing Market Overview 

Like many other states, Kansas’s housing market was experiencing lower inventory and higher prices for an extended period. Additional inventory in April 2024, though, impacted the outlook. New listings accounted for 3,713 homes, which is a 0.5% increase from last year. 

Inventory is still the main issue regarding the housing market. Kansas’s employment rate reached a record high in 2023 and future job prospects indicate an economy that would support an improving housing market. The current environment is due mostly to pent-up demand, low housing inventory, and lower borrowing costs. 

Despite these issues, real estate in Kansas is more affordable than many other states in the country. 

Kansas Housing Market Trends 

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

Note: These statistics are based on Redfin’s monthly housing data from April 2024. 

Median Home Price 

Kansas’s median home price is $266,500, according to Redfin’s monthly housing market data from April 2024. This is a growth of about 5.1% since April of last year. The median home price for a house in America was $433,500 in April of 2024, so Kansas is well below that mark. 

Number of Homes Sold in April 2024 

In April, there were 8,728 homes sold in Kansas, up 6.5% from last year according to the Redfin dataset. Thus, even though Kansas’s market has some issues, selling and buying are occurring at a high rate. However, it’s important to 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 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 Kansas is 22 days. This is below the national average, so Kansas leans to sellers when it comes to this metric. Kansas’s DOM is another indicator that the market is a more of a sellers’ market then buyers’ market. 

New Supply Statistics 

Housing supply continues to be an issue in Kansas. It’s tight, and competition is generally high across the state. There is only one month of supply in Kansas right now, which is well below the four to five months of supply experts generally say is best. 

While supply in general is up from last year, it’s not keeping up with demand. Experts hope this trend will course-correct a bit in 2024.  

Property Tax Rate 

The average property tax rate in Kansas is 1.34%, according to Rocket Mortgage. This places Kansas’s average property tax rate as the 37th lowest 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 Kansas and the value of the home, so this average rate may or may not be indicative of your situation. 

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 5,418 homes experienced a foreclosure filing (according to recent data from ATTOM). Based on this data, Kansas’s foreclosure rate is one of the lowest in the nation. 

Hottest Local Markets in Kansas 

The Kansas real estate market has several noteworthy markets. Here are two of the most noteworthy: 

1. Wichita

Wichita is the most populated city in Kansas. Home to almost 400,000 citizens, Wichita is an industrial and technological hub and center for media, culture, and commerce.  

The Wichita real estate market is extremely competitive with houses selling in 9 days on average. The median sale price was $210,000 in April 2024, down almost 2.3% from last year.  

Wichita boasts the third-lowest income-to-debt ratio in the country and has a low unemployment rate at 3% (national average is up around 4% for context). Many experts refer to it as a recession-proof area.  

2. Topeka

Topeka is the capital of Kansas. It runs along the Kansas River and is home to a rich arts scene and a busy commerce scene. It has a population of around 126,000. 

The real estate market is somewhat competitive with a median home price of $175,000 in April 2024. The DOM is 7 days in Topeka, so houses typically sell very quickly. According to this 2023 study from Realtor.com, Topeka was the top emerging housing market in America. This study emphasizes housing markets that offer a reasonable cost of living and booming local economies that are appealing without being over-crowded. 

Factors Impacting the Kansas Housing Market 

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

Mortgage Rates 

High mortgage rates are a continuing difficulty for would-be homeowners in the U.S. Kansas’s average rates for 30-year mortgages in June of 2024 are below the national average at 6.94%. Higher interest rates deter borrowing and discourage those who already own homes from putting their homes on the market. Many homeowners across the nation report feeling “tied” to their current homes, as it is unlikely they will secure a mortgage rate as low as their current one if they move to a new property. Prospective buyers in Kansas would be wise to 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 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 Kansas. 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 

In Kansas, the population grew nine out of the past 12 years between 2010 and 2022. The fastest growing section of this population is the 65 and older group with a 33.7% increase.  

The percentage of Kansas citizens living in urban counties rose 2.4 percentage points from 54.9% to 57.3% in 2020. In the same 10 years, Kansas’ urban counties grew 7.5%, which is just under the national average. 

A growing population mixed with a supply shortage means demand still outpaces supply in many areas. 

Economic Health 

The Kansas economy grew 9.7% in Q3 of 2023, which was the largest rate in the nation. This was up from the second-fastest rate in the nation in Q2 of 2023. This economic growth signals a healthy economy on the rise. 

Naturally, this health impacts the housing market. Personal income grew 4.3% over Q3 of 2023. This news bodes well for buyers and sellers in a promising market. 

Kansas Housing Market Forecast 

According to the Wichita State University Center for Real Estate, Kansas home values will continue to appreciate in the coming year. Lower supply and a lack of consistent new construction combine as the main culprits.  

Kansas is and seems likely to continue to be a sellers’ market into the near future. A favorable environment for businesses also impacts the housing market forecast.  

Likelihood of Kansas Housing Market Crash  

Most experts don’t see a crash anytime soon for the KS housing market. As supply continues to increase and interest rates decline, the market should stabilize a little bit. Demand still outpaces supply, and that doesn’t seem likely to change soon. The overall healthy economy, solid job market, and affordability also make it very unlikely. 

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 Kansas came in at 24.69%. Comparing this to somewhere like Hawaii (which comes in with the lowest percentage at 10.56%) gives you an idea of how affordable Kansas is.  

Forecast for The U.S. Housing Market 

Now that we’ve looked at Kansas’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’s median existing-home sale price in April was around $432,812 per Redfin. The inventory, though, remains low. A balanced market typically has a five-to-six-month supply, but the current figure is two. 

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.  

Kansas 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.  

Kansas’s current rental market is influenced by these trends, but not dominated by them. Kansas is a very affordable state, in terms of rentals. Below are just a few of the current trends (as of June 2024) for Kansas’s rental market based on data pulled from Zillow: 

Kansas Rental Market Key Trends 

• Median rent: $1,250 (note: This is almost $1,000 lower than the national median of $2,132 as of June 2024) 

• Month-over-month rent change: +$10 

• Year-over-year rent change: +$85 

• Available rentals: 2,709 

The Kansas rental market, like the housing market, is known for its affordability. Its prices are lower than most other states in the country. In fact, Wichita, Kansas has the second cheapest median rent in North 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 Kansas housing market in 2024 is marked by a blend of stability, challenges, and changes, 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 KS, the macro- and micro- economic trends outlined above will impact your decision-making. Market dynamics like changes in home prices, inventory levels, and interest rates will continue to be critical for stakeholders in local real estate.