Posted by 
Big city life isn’t for everyone. Even those who love the hustle of a downtown often find that their budgets can’t afford the high home prices associated with city living.
Small cities offer an appealing alternative to those looking to save on housing costs. Closer access to nature, less traffic, tight-knit communities, and affordable housing prices are just some of the attractions of small city living.
The exodus from large metros during the pandemic also sparked greater housing demand in small cities and led to many experiencing impressive price growth. Whether you’re looking to retire in peace, start a family, or enter the housing market for the first time, small cities offer excellent equity-building opportunities.
Zoocasa analyzed home price data in over 70 cities to determine the best small cities in America for real estate investment. For this study, a small city was defined as having a population of between 75,000 and 100,000 (Some cities were excluded due to insufficient data or negative price growth over one-year and three-year periods). The following weights were used to determine the ranking: median home price (60%), 1-year price growth (15%), and 3-year price growth (25%).
The Northeast Boasts Many of the Best Small Cities to Live in America
New Yorkers left the city in droves during the pandemic, helping surrounding areas see exponential population growth. No state benefited more from this than Connecticut, which saw over 38,000 New Yorkers move to the state in 2020. Consequently, two small cities in Connecticut ranked highly on our list for home price appreciation.
From 2022 to 2025, Danbury’s median home price grew more than any other city we analyzed, rising by 54.5% to $560,000. Norwalk has a less affordable home price at $780,575, but with 3-year price growth of 34.1% and 1-year price growth of 12.3%, homebuyers can feel secure in their investment.
Massachusetts also received an influx of New Yorkers during the pandemic, boosting housing demand and prices. Fall River and Lawrence rank in the top 20 best small cities to invest in, with 3-year price growth of 27.8% and 33.6%, respectively. Fall River’s median home price of $459,950 is low compared to the state median of $575,500, offering an affordable option for local first-time buyers or retirees.
Erie, PA; Trenton, NJ; New Rochelle, NY; Reading, PA; and Nashua, NH are other small northeastern cities that have experienced home price appreciation of over 20% since 2022. Compared to their surrounding areas, these small cities have lower median home prices and typically lower costs of living overall.
Small Cities in the Midwest Offer Most Affordable Homes
Climate migration is leading more homeowners to look to the Midwest for affordable housing and relief from natural disasters. While many people will be drawn to the metropolises of Chicago, Kansas City, or Minneapolis, smaller cities in the region allow your money to go further, getting you more house for less of a cost. You don’t even have to sacrifice big-city life for affordable housing in some places..
Kenosha, WI, is located a short distance between Milwaukee and Chicago, allowing homeowners to enjoy small-town living while still getting access to two major metros. The city’s median home price of $280,000 is significantly below Milwaukee and Chicago’s median prices, and home prices are appreciating rapidly. Kenosha’s median home price has increased by 32.1% since 2022 and by 10.7% since 2024. Similarly, Racine, WI, is on the outskirts of Milwaukee and has experienced a 3-year price growth of 30.6% with a median home price of $298,000.
Despite being further from major metros, the lower median home prices in Champaign, IL, and Duluth, MN, may offset any inconvenience from being more rural. At $216,200, Champaign has one of the lowest median home prices in the country, while Duluth is equally affordable with a median of $269,400.
The Best Small Cities in the Sun Belt
California is home to the country’s most expensive real estate markets, but beyond those metropolitan areas, there are affordable small cities to live in. Apple Valley, Merced, Tracy, and Indio are small California cities with median home prices below $550,000. Among those, Apple Valley leads in 3-year price appreciation at 14%, followed by Tracy at 6.6%, Merced at 6.3%, and Indio at 5.4%.
The best small cities in California to invest in:
| City | Median Home Price | 3-Year Price Growth |
| Santa Barbara, CA | $1,515,000 | 44.3% |
| Apple Valley, CA | $439,000 | 14% |
| Merced, CA | $414,500 | 6.3% |
Florida is another state that has gotten more expensive in recent years, but these small towns have maintained their affordability while still building equity for homeowners.
The best small cities in Florida to invest in:
| City | Median Home Price | 3-Year Price Growth |
| Deltona, FL | $326,500 | 15.8% |
| Boca Raton, FL | $647,000 | 20.9% |
| Kissimmee, FL | $391,763 | 7.3% |
As the median home prices in Houston and Dallas near $400,000, prospective homebuyers in the state might wonder where to find a more affordable deal. Small cities in Texas have a much lower home price, typically under $300,000, and are growing in popularity, giving homeowners an equity-building advantage.
The best small cities in Texas to invest in:
| City | Median Home Price | 3-Year Price Growth |
| Longview, TX | $267,500 | 24.4% |
| Mission, TX | $240,000 | 20% |
| San Angelo, TX | $266,000 | 17.7% |
The Small City Advantage: Why You Should Consider the Move
American households are more cost-burdened than ever, with 31.3% of all households spending more than 30% of their income on housing costs. Lately, household budgets have been further squeezed by inflation. A survey by Resume Now found that 73% of American workers struggle to afford anything beyond basic living expenses.
With housing costs typically making up the largest portion of a household budget, one of the easiest ways to reduce your cost of living is by moving to a more affordable city. This move can significantly reduce financial stress and lower your overall expenditures. In the long run, buying a home in a smaller city will allow you to build more equity than renting in a larger, more expensive one.
Studies have also shown that urban dwellers are likelier to have lower reported happiness levels than rural ones. Given these benefits, moving to a small city could improve not only your financial well-being but also your mental well-being.
Want to find more small towns in your area Our agents can help! Give us a call today to speak with an agent in your area and start planning your next real estate endeavor.
Methodology:
Median home prices were sourced from a combination of the National Association of Realtors and local real estate boards, using the most recently available data.
Population estimates for 2023 were sourced from the U.S. Census Bureau.
The ranking was determined by calculating key metrics for each city, prioritizing lower home prices and consistent price appreciation. Each metric was normalized and weighted to reflect its importance in determining a city’s overall ranking. The following are each category’s weight: median home prices (60%), 1-year price growth (15%), and 3-year price growth (25%).
The post Real Estate Gems: The Best Small Cities in America to Invest In appeared first on Zoocasa Blog.
