Learn more about the housing market in Mississippi

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.  

Mississippi Housing Market Overview 

Mississippi is known for rich cultural traditions like barbecue and Bluegrass music, natural beauty, and abundant wildlife along the Mississippi and Gulf Coast. 

Most of the state is rural, with agriculture driving the Mississippi economy, but manufacturing and an emerging tourism sector both contribute substantially to the state’s GDP. 

In 2024, Mississippi also faces many challenges. With one of the lowest average incomes in the U.S. (Mississippi’s median household income is currently $35,467), Mississippi lags behind neighboring southern economies. Additionally, almost 20% of Mississippians live below the poverty line, compared to the national percentage at 11.8%. Residents face a variety of socioeconomic disadvantages, including food deserts and limited public transportation and healthcare options. 

Some of these factors likely contribute to the state’s low housing prices and appreciation compared to other states. However, the flip side advantage of this is that owning a home is affordable in many Mississippi cities. A less competitive buyer’s market means that homeownership is more in reach. Mississippi also attracts many investors looking to revamp distressed homes and those interested in turning a property into a vacation home or short-term rental for travelers to the Gulf Coast. 

In this article, we’ll cover the Mississippi housing market, including key metrics, concepts, and forecasts you need to know to understand real estate in the Magnolia State. 

Mississippi Housing Market Trends 

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

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

Median Home Price 

The median sale price for homes in Mississippi is currently $239,200, down 2.4% since last year’s median home value according to monthly housing data from Redfin for April 2024. Mississippi has some of the most affordable home prices in the country. However, it’s worth noting that some cities in Mississippi have slightly higher average home prices. For example, the median home price in Madison, Mississippi is $470,000. 

Number of Homes Sold in April 2024 

1,851 homes sold in Mississippi in April of this year, down almost 15% from April of last year. This metric gives us a good picture of the current sales volume in Mississippi. 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 current median days on market (DOM) in Mississippi is 40 days. This means on average, homes in Mississippi stay on the market for around 40 days before being put under contract, indicating a less competitive buyer’s market. 

New Supply Statistics 

On average, there were about 2.71 new residential construction permits per 1,000 people in Mississippi in 2021. This tells us that new construction is slower in Mississippi, as the state is not building new homes as quickly as other nearby southern states like Louisiana and Georgia. 

Property Tax Rate 

The average property tax rate in Mississippi is 0.67%, according to Rocket Mortgage. This places Mississippi’s average property tax rate as the 16th lowest in the U.S. However, keep in mind that property taxes vary widely depending on the specific county of Mississippi and the market value of the home. 

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 3074 homes experienced a foreclosure filing (according to recent data from ATTOM). Based on this data, Mississippi’s foreclosure rate is lower than most other U.S. states. 

Hottest Local Markets in Mississippi 

Although Mississippi properties may not be as in-demand as those in neighboring southern states, the state nonetheless features a number of local housing markets with great prospects for homeowners and investors. Below we cover a few of these markets. 

1. Madison

The hometown of the founding father and fourth U.S. President with the same name, Madison is an up-and-coming market in central Mississippi, just north of Jackson. The median home price in Madison is $470,000, almost twice as much as the state median, and homes sell here in just 24 days on average according to Redfin. The market is competitive and seeing significant appreciation. 

2. Gulfport/Biloxi

The Gulfport/Biloxi metro area is located at the southern tip of Mississippi, on the Gulf Coast. Gulfport is the second most populous city in Mississippi, behind only Jackson. The median home price in the Gulfport area is $198,000, making the city both highly affordable and an ideal location for short-term rental properties or vacation homes. 

3. Jackson

Jackson is Mississippi’s capital and most populated city. The median sales price for a home in Jackson is $120,000, making Jackson another highly affordable city for home buyers. While homes in Jackson sell in an average of 33 days, hot homes can sell in as few as eight days. 

Economic Factors Impacting the Mississippi Housing Market 

A holistic view of the Mississippi housing market requires a basic understanding of the main economic drivers affecting the market. Let’s look at a few critical ones below: 

Mortgage Rates 

High mortgage rates are a continuing challenge for would-be homeowners in the U.S. Mississippi’s average rates for 30-year mortgages in June of 2024 is 7.25%, slightly higher than the national average. Higher interest rates deter borrowing and discourage those who already own homes from putting their homes on the market. Many homeowners 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 Mississippi 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 Mississippi. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

Population Changes and Demographics 

Population, migration, employment, and other demographic factors can each influence the housing market. Increased migration can lead to inflated prices and rents as demand increases, while slowing population growth can lead to more affordability for residents. Mississippi’s population is declining along with neighboring state Louisiana’s population, according to Census data from the past few years. This could continue to affect jobs and housing in the state. 

Mississippi Housing Market Forecast 

Housing market experts predict that Mississippi’s housing market will see appreciation growth throughout the second half of the year, although that growth will likely remain lower than the national average. Experts also forecast that Mississippi’s inventory will remain tight, as construction of new homes lag far behind buyer demand in the state. Home values will likely continue to rise (albeit in affordable environments) until new listings hit the market, either via development or an influx of sellers after mortgage rates drop. 

Likelihood of Mississippi Housing Market Crash  

Experts generally agree that a housing market crash in Mississippi is unlikely. Mississippi’s affordability, tourism sector, and continued appreciation (although lower than the national average) will protect the state’s market moving forward. The rest of the year will likely see increased competition and demand as prices in Mississippi remain low and rate cuts remain on the horizon. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at the housing market in Mississippi, 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.  

Mississippi 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.  

This short summary leads directly into Mississippi’s current rental market, with key trends from Zillow. 

Mississippi Rental Market Key Trends 

• Median rent: $1,425 

• Month-over-month rent change: +25 

• Year-over-year rent change: +30 

• Available rentals: 1,759 

Conclusion 

The Mississippi housing market in 2024 is marked by a blend of affordability 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 Mississippi, 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 Mississippi real estate.