Best Cities for Homeownership in Iowa

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Even though its economy doesn’t often make the headlines, Iowa weathered the recession better than the rest of the nation. The 4.4% unemployment rate is 2 points below the national average, and the state never once cracked 7% even during the peak of the recession when the national average jobless rate was over 9%, according to Bureau of Labor Statistics data. As well, strong manufacturing, financial services sectors and low business taxes have all helped Iowa’s economy improve for eight consecutive months, as shown by an index published by the Iowa Department of Revenue.

Given the healthy economy and a homeownership rate 7% above the national average, it’s a good bet that buying a home in Iowa is likely to pay off. However, choosing a location can sometimes be difficult, so NerdWallet crunched the numbers to find the best places for homeownership in Iowa. Here’s what the top cities had in common:

  • Des Moines was by far the most popular metropolitan area with 6 out of 10 of the cities on our list within 20 miles of the city’s downtown.
  • Three of our top 10 cities saw not only a double-digit population growth, but also unemployment figures of less than 3%, indicators of a healthy local economy.
  • Although the median home value was $119,200, homeownership costs on average still take up 28.5% of Iowa residents’ monthly income.
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NerdWallet looked at 38 communities in Iowa with more than 10,000 residents to determine which were the best places for homeownership. Our analysis answered three main questions:

1. Are homes available? We looked at the area’s homeownership rate to determine the availability of homes. A low homeownership rate is likely a signal of competitive inventory, more options for renters rather than buyers and expensive housing. Areas with a high homeownership rate led to a higher overall score.

2. Can you afford to live there? We looked at median household income, monthly homeowner costs and median home value to assess affordability and determine whether residents could live comfortably in the area. We used monthly homeowner costs to measure cost of living. Areas with high median incomes and low cost of living scored higher.

3. Is the area growing? We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth. This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.

For more details on our methodology, please see the section at the end of the report.

Does the data tell you truth? Let us know what you think about our list in our comments section. 

Best Cities for Homeownership in Iowa

1. Waukee

Waukee tops our list of best cities for homeownership in Iowa with both the highest rate of homeownership at 89.3%, and the state’s biggest growth in population with a 14.7% increase from 2010 to 2012. Waukee’s businesses see the benefits of Iowa’s low property and sales taxes, which could be the reason for the city’s low unemployment rate of 0.5%, according to U.S. Census Bureau surveys. Local employers include Atlantic Bottling Company, an independent bottler and distributor of Coca-Cola products; lumber company Gilcrest Jewett; and Quad Graphics, a directory printer. Waukee, just 17 miles from downtown Des Moines, is becoming a top destination for homebuyers and employers alike.

2. North Liberty

North Liberty, a suburb of Iowa City, has the advantage of being located within commuting distance to Cedar Rapids and Iowa City, while still being near to outdoor recreation areas. North Liberty is about 7 miles south of Hawkeye Wildlife Management Area, a 13,708-acre state park for hunting, wildlife watching and boating. To the east, residents have access to Lake Macbride State Park, a 2,180-acre park with sandy beaches, boat ramps and recreational areas for swimming, camping and hiking. With the nearby recreational opportunities and a low monthly median homeowner cost of $1,382, it is no wonder North Liberty has the second-highest population growth on our list.

3. Ankeny

Located about 12 miles from downtown Des Moines, Ankeny saw its population grow 8.3% to 45,732 from 2010 to 2012. The city houses several large employers including John Deere Des Moines Works, Sysco, a food service company, and Des Moines Area Community College. Ankeny High School received a top rating of 10 by GreatSchools.org. For fun, Ankeny throws an annual four-day summer festival featuring music, a parade and food from local vendors in a carnival atmosphere.

4. Johnston

The city of Johnston has a strong population growth at 10.1%, and a homeownership rate just shy of 80%. While Johnston has the highest median home value in Iowa at $238,400, this is offset by the second-highest median monthly household income of $7,835. Johnston is home to Camp Dodge, where the Iowa National Guard is based, Iowa Public Television and the Paul J. and Ida Trier House, which was designed by Frank Lloyd Wright.  Additionally, the town plans to redevelop the 123-acre Merle Hay Road Gateway area into an economic hotspot, with better access to recreation on the river, construction of luxury and more-affordable houses, tourism and hospitality businesses.

5. Urbandale

Joining our list as the third city in the greater Des Moines area, Urbandale is by its own account, “a modern suburb that has not yet forgotten its small-town charm.” The combination of factors must work since 97% of residents positively recommended Urbandale as a place to live, according to community-run surveys taken in 2013. Homeownership costs take just 22.7% of income in Urbandale, and a 5.1% growth rate supports an already strong population of over 39,000 to give Urbandale good marks for homeownership.

6. Altoona

Altoona is a great place for all kinds of fun with Adventureland, a family-oriented amusement park, and Prairie Meadows Racetrack, where you can play the horses or gamble at the casino. But it’s not all play in Altoona, where the unemployment rate of 3.3% is below the national average. Facebook took notice of Altoona when it decided to make the city the site of a 476,000-square-foot data center. According to Facebook, the construction of the first phase of the center required more than 435,000 hours for over 460 workers. Facebook also plans to build a second data center to bring the project to a total value of $1 billion.

7. Marion

Marion has made a name for itself as an Iowa hub for the arts, especially every May at the Marion Arts Festival. The Art Fair SourceBook ranked the Marion event as the best one-day show in the country, and it took second place for the best return on your investment. Marion also is home to the Granger House Victorian era museum, and the Marion Heritage Center, a cultural and historical center. The city recently celebrated the opening of the Klopfenstein Amphitheater for the Performing Arts. For more active pursuits, residents have their choice of two in-town golf courses and three more just outside town.

8. Clive

Although Clive has the second-highest median home value in Iowa at $228,900, its residents also bring home the highest monthly median household income, so they pay only 21.7% of their income toward homeowner costs. Clive’s strong economy has benefited from being an affiliate of the Greater Des Moines Partnership, which brought $385 million into the regional economy in 2013. Highways 35 and 80 help Clive’s image as a commuter and business friendly location, but for those looking to park their vehicle, the city has a paved 11.3-mile bike trail, which continues onto the 89-mile Raccoon River Valley Trail.

9. Bettendorf

Bettendorf is the only city on our list near the large city of Davenport, and it is also considered one of the “Quad Cities” on the Mississippi River. The city of about 30,000 offers not only quick access to the Mississippi, but it also was given an honorable mention by the League of American Bicyclists for its bicycle friendly community. Economically, Bettendorf has an unemployment rate of 2.6%. The major employers include Alcoa, the aluminum producer, and Isle of Capri Casinos.

10.  Marshalltown

Marshalltown is a great place to live for those looking to save on housing, since the median home value is just $97,600. But residents here are in for a serious commute to the nearest big city with over 50 miles to Des Moines to the south, and nearly 60 miles north to Waterloo. Even though Marshalltown isn’t near a major metropolitan area, it is by no means a place with nothing to do. Marshalltown is the county seat of Marshall County, and the home of Marshall Community College, which has basketball, baseball and volleyball games open to the public.

 

Check out the interactive map for our top 10 cities in Iowa. The darker the color of the point, the more affordable it is according to our affordability score. Click on points to view more information.

Rank City Home Ownership Rate Median Selected Monthly Homeowner Costs Median Monthly Household Income Homeowner costs as a percentage of household income Median Home Values 2012 Population 2010-2012 Population Growth Overall Score for Home Owners
1 Waukee 89.3% $1,599 $6,509 24.6% $187,800 14,108 14.7% 85.7
2 North Liberty 69.9% $1,382 $4,909 28.2% $155,500 13,330 12.1% 66.3
3 Ankeny 78.5% $1,504 $6,135 24.5% $174,000 45,732 8.3% 65.8
4 Johnston 79.8% $1,859 $7,835 23.7% $238,400 17,316 10.1% 65.1
5 Urbandale 79.9% $1,572 $6,928 22.7% $191,500 39,426 5.1% 59.8
6 Altoona 74% $1,395 $5,593 24.9% $162,900 14,563 5.9% 57.9
7 Marion 73.6% $1,361 $4,927 27.6% $144,000 34,750 4.4% 53.9
8 Clive 77.8% $1,741 $8,038 21.7% $228,900 15,557 4.1% 53.3
9 Bettendorf 77% $1,409 $5,757 24.5% $170,100 33,347 2.6% 52.8
10 Marshalltown 69.1% $1,056 $3,889 27.2% $97,600 27,465 1.4% 49.1

Methodology

The overall score for each city was derived from these measures:

1. Homeownership rate made up 33.3% of the total score. A higher rate earned a higher score. The rate comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

2. Selected monthly owner costs as a percentage of median household income made up 16.7% of the total score. A lower percentage earned a higher score. Monthly homeowner costs as a percentage of median household income made up one-half of the affordability score. Median household income comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 03. The figure for monthly homeowner costs comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

3. Median home value made up 16.7% of the total score. A lower value earned a higher score. Median home value made up one-half of the affordability score. Median home value comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

4. Population change from 2010 to 2012 made up 33.3% of the total score. A higher percent change earned a higher score. The 2010 population comes from the 2010 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. The 2012 population data comes from the 2012 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. NerdWallet calculated the percent change.

For this study, we analyzed places 38 places in Iowa with a population of 10,000 or more.

Iowa image via Shutterstock.