In Iowa, the gap between city and country isn’t just cultural—it’s economic. Over the past 15 years, homebuying patterns in urban and rural areas have followed very different paths. During the post-recession recovery, cities like Des Moines and Cedar Rapids saw steady growth, while rural counties struggled with stagnant demand and population loss. Then came the pandemic-era boom, which sent city prices soaring—but also sparked unexpected interest in some rural areas. Comparing 2009–2018 to 2020–2024 reveals just how much location has shaped opportunity in Iowa’s evolving housing market.

Iowa’s Urban and Rural Housing Landscape

iowa housing
Shutterstock

Urban parts of Iowa, like Des Moines, Cedar Rapids/Iowa City, and the Quad Cities, tend to have more housing options and demand. These metro areas have seen population growth and new development, fueling home sales and new subdivisions. In cities, buyers can find everything from historic houses to new condos and townhomes.

In contrast, rural communities often have mostly older single-family homes and far fewer new builds in recent years. This means urban buyers generally face more choice but also stiffer competition, whereas rural buyers may find lower prices but very limited inventory of quality homes. For example, many small Iowa towns have aging housing stock and not many young families moving in, so any well-kept, affordable house that hits the market can see high demand simply because there are so few available.

Rural Housing Shortage

Another challenge in rural Iowa is a housing shortage that has been building for years. Developers and builders are often hesitant to invest in new homes in tiny towns, and that has led to an imbalance. As older homes age out of the market and not enough new ones replace them, rural areas struggle with a lack of “attainable” modern housing.

This is compounded by an aging population in many counties. Fewer young buyers means fewer people to purchase homes or spark new construction, creating a cycle that keeps rural inventories tight. Iowa’s state and local leaders recognize this problem: by one estimate the state needs about 25,000 additional homes by 2030 to meet demand. This shortfall affects both rural and urban communities, but it’s felt sharply in small towns where there might be only a handful of homes for sale at any given time.

Homebuying Trends After the Great Recession (2009–2018)

iowa houses
Shutterstock

The period from 2009 to 2018 saw Iowa’s housing market recover from the late-2000s housing crash. In the early 2010s, home sales were sluggish across much of the state, reflecting the broader economic recession. For instance, in the Des Moines metro area, annual home sales fell to around 9,300 in 2011 at the bottom of the downturn. Many homeowners were cautious, and construction of new homes slowed during these years.

Both cities and rural areas felt the chill, though Iowa didn’t experience as severe a crash as some coastal markets did. By around 2012, as jobs and consumer confidence crept back, housing activity started picking up. Iowa’s cities in particular benefited from improving economic conditions and population gains, which brought more buyers into the market.

Steady Growth (2012-2017)

From 2012 through 2017, Iowa enjoyed a period of steady growth in homebuying. As the economy improved, more people (especially in metro regions) were able to purchase homes. In the Des Moines area, home sales rose roughly 12% annually on average during 2012–2017, reflecting strong demand as the region attracted new residents.

Other cities like Cedar Rapids and Iowa City also saw healthy housing markets. Statewide, the number of homes sold climbed back to pre-recession levels. By 2018, Iowa recorded about 41,387 homes sold for the year, essentially on par with the previous year and indicating a stable market. The median sale price in 2018 was around $161,000, up modestly (~3.9%) from 2017, showing that home values were rising but not skyrocketing. Homes were selling faster too – the average time on market in 2018 was just 64 days, which was two weeks quicker than a year before.

Urban vs. Rural Differences

During this 2009–2018 span, urban vs. rural differences began to widen. Job growth and in-migration to Iowa’s metropolitan areas drove most of the home sales gains. Polk County (Des Moines) and its suburbs in Dallas County led the state’s growth, resulting in lots of new housing developments on the urban fringes. In fact, suburban Dallas County now boasts the highest median home values in Iowa, thanks to an influx of upscale developments and buyers.

Meanwhile, many rural counties saw little to no population growth, which translated into softer housing demand. Smaller towns didn’t see the same volume of transactions – some rural counties even had net population loss, meaning fewer homebuyers. Builders focused on where the people were (metro areas), leaving rural Iowa with fewer new homes.

By the late 2010s, it was common to hear that Iowa’s rural housing supply was aging and insufficient. Any new housing that did get built in small communities was often quickly snapped up, since it was so rare. Overall, urban markets set the pace with more robust sales and price increases, while rural markets stayed more price-stable and affordable – but also more stagnant in terms of activity.

Pandemic-Era Housing Boom (2020–2024)

Housing Boom
Shutterstock

The COVID-19 pandemic ushered in a tumultuous but largely booming time for housing in Iowa. After a brief pause in the spring of 2020, homebuying surged thanks to rock-bottom interest rates and new lifestyle priorities. Statewide, home sales jumped about 9.4% from 2019 to 2020, even as parts of the economy shut down.

Iowa had roughly 40,563 homes sold in 2020, up from about 37,000 the year before. This was a big increase in activity, showing that many people took advantage of low mortgage rates to buy homes. Urban areas led the charge: by mid-2021, the Des Moines metro hit an all-time high of ~21,000 annual home sales, far above the levels seen a decade prior.

Market Frenzy

Buyers were entering bidding wars for desirable properties in cities and suburbs. In Linn County (Cedar Rapids area), for example, early 2022 saw homes averaging just 21 days on the market before selling – an incredibly fast pace. “For sale” signs were scarce because houses were getting snapped up so quickly.

Even rural areas felt the ripple effect. While they weren’t as frenzied as Des Moines or Cedar Rapids, many small-town markets saw houses selling faster than usual. Remote work during 2020–2021 enabled some city dwellers to consider moving to quieter rural towns, expanding the buyer pool for those areas.

Price Growth

Home prices climbed rapidly during the pandemic housing boom. With demand outstripping supply, Iowa’s median and average prices rose to new heights. The average sale price of a home in Iowa was about $209,600 in 2019; by 2023 it had jumped to roughly $262,000. That’s an increase of over 25% in just a few years.

The statewide median price followed a similar trajectory, reaching approximately $231,600 by April 2024. Practically speaking, this meant buyers in 2024 were often paying significantly more for the same Iowa house than they would have in 2018 or 2019. Low interest rates in 2020–2021 helped keep monthly payments manageable despite rising prices, but by 2022 and 2023, higher mortgage rates started to bite into affordability.

Inventory (homes for sale) hit record lows in many markets during the boom; at one point in early 2021, Cedar Rapids had only about half a month’s supply of homes available – an extremely tight market.

Urban vs. Rural Dynamics

rural Iowa
Shutterstock

In the urban vs. rural context, the pandemic didn’t flip the script but did blur it a bit. Urban and suburban counties still saw the most intense growth. The Des Moines suburbs, for instance, remained a hotspot – fast-growing communities like Waukee and Ankeny continued to add new houses and attract young families.

At the same time, rural real estate got an unexpected bump in popularity during 2020–2021. Some families sought out country living for more space, or bought acreage outside city limits since remote work allowed them to commute less. Iowa’s Great Lakes region (around Lake Okoboji in Dickinson County) became a particularly popular escape; it’s a rural resort area that saw increased interest.

Nonetheless, Iowa’s big-picture trend held: metro areas outpaced rural areas in homebuying. One housing analyst noted that while every corner of the state felt the 2020–2022 boom, “real estate markets across Iowa vary significantly, with rural areas experiencing slower changes compared to the dynamic metro markets”. In plain terms, cities saw bigger spikes in sales and prices, whereas rural markets had more muted upticks.

By late 2022 into 2023, as the boom cooled, urban markets also felt the slowdown first (as higher interest rates priced out some buyers), and rural markets, which were never as overheated, simply returned to their traditionally quieter state.

Market Cooling (2022-2023)

After peaking in 2021 and early 2022, the housing frenzy began to settle. The Federal Reserve raised interest rates sharply in 2022 to combat inflation, which pushed mortgage rates up quickly. This slowed home sales notably in 2023. In Iowa, the number of closed sales fell from about 43,728 in 2022 to 37,108 in 2023 – a drop of 15.1%. Both single-family homes and townhome/condo sales took a similar dip (around −15% year-over-year).

Many would-be sellers decided to stay put (since they didn’t want to give up their ultra-low mortgage rates from prior years), and buyers faced higher borrowing costs. Even as sales volume declined, home prices in 2023 remained high – the average price rose another 5.4% from 2022’s level, reaching roughly $262k. This was because inventory was still relatively tight and demand, while cooled, hadn’t evaporated.

Essentially, Iowa’s housing market in 2023 started to move back toward equilibrium after the roller coaster, but it was a “new normal” of higher prices and a larger gap between bustling city markets and slow rural ones than existed a decade before.

Upsizing, Downsizing, and Second Homes

Beyond just where people are buying, the 2020–2024 period versus 2009–2018 also saw shifts in what people are buying and why. One noticeable pattern involves upsizing vs. downsizing.

Upsizing Trend

Many mid-career and growing families in Iowa have been upsizing in recent years, especially during the pandemic boom. With historically low interest rates available in 2020–2021, it became financially attractive for a lot of homeowners to trade up to a larger house (even if the new home was more expensive) because their monthly payments could stay reasonable.

For example, a professional in their 40s might have sold a starter home in 2019 and built or bought a much larger “forever home” in 2021, taking advantage of a 3% mortgage rate to afford the upgrade. These upsizers often sought more square footage, extra bedrooms for kids or a home office, and bigger yards – a trend that favored suburban and even rural properties with more land. The data reflects this: nationally and in Iowa, larger homes in the $300k–$500k range were in high demand through 2021 as families looked for space.

Modest Downsizing

On the flip side, downsizing (moving to a smaller home) has been a gentler trend. Older Iowans, such as empty-nest Baby Boomers in their 60s and 70s, sometimes choose to downsize for convenience – for instance, moving from a big 4-bedroom house in the country to a one-level townhome or condo that’s easier to maintain. However, in Iowa this trend has been fairly modest.

Thanks to the state’s relatively low cost of living, many retirees here don’t feel as much financial pressure to sell their houses and rent or buy smaller units (unlike in very expensive states where property taxes and upkeep on a large home can be a big burden). As a result, quite a few older homeowners have “aged in place,” staying in the same homes they’ve owned for years.

Those who do downsize tend to gravitate to low-maintenance options – for example, some have moved into newly built condos in downtown Des Moines or Iowa City, enjoying an urban lifestyle but with fewer responsibilities than owning a large house. In the late 2010s, developers did put up a few upscale condo buildings targeting this demographic, and there was a niche uptick in empty-nesters opting for condos or patio homes. Still, downsizing was nowhere near as widespread as upsizing during our comparison periods.

Second Home Surge

Perhaps the most striking buying behavior shift in 2020–2024 was the surge in second-home purchases. The pandemic blurred the line between work and vacation, and many high-income households sought out vacation properties or weekend getaways. Nationally, vacation home sales exploded – they rose by 16.4% in 2020 (far outpacing the growth in overall home sales) and then by an astounding 57.2% year-over-year in the first months of 2021.

Iowa’s share of these vacation-home buyers may be small, but it was noticeable. Plenty of well-off Iowans joined this trend by buying cabins, lake houses, or country retreats, especially as remote work allowed more flexibility. A favorite locale was the Iowa Great Lakes region (around Okoboji), known for its beautiful lakes and recreational appeal. In 2020 and 2021, realtors in that area reported a rush of buyers snapping up lakefront cottages and lots – some lifelong Iowa residents fulfilling a dream of a summer house by the water.

Others chose second homes out of state (warmer climates like Arizona or Florida are perennial draws for Midwesterners in winter). The key point is that second-home ownership became more common as people realized they could work from a cabin by the lake as easily as from their city office. This was a change from 2009–2018, when second-home buying was more of a niche (often limited to the very wealthy or for use as hunting cabins or inherited farm houses). By 2021, middle-class professionals with the means were entering the second-home market in greater numbers, reflecting a nationwide shift in housing preferences under the pandemic.

Rental Market Trends and Homeownership Context

house to rent
Shutterstock

To round out the picture, we should consider Iowa’s homeownership and rental trends. Iowa consistently has a high homeownership rate – about 72% of households own their home in recent years – which means roughly 3 out of 4 families are homeowners. The remaining quarter of households are renters, a group largely concentrated in urban areas (where there are more apartments, college students, and young professionals).

During 2009–2018, as the economy recovered, the homeownership rate in Iowa actually ticked up a bit, indicating some renters were becoming buyers. Conversely, in the tight housing boom of 2020–2022, some would-be buyers found themselves renting longer because houses were hard to secure or rising interest rates in 2023 made buying less feasible. In short, Iowa’s strong homeownership culture persisted, but the balance between owning and renting shifted slightly with market conditions.

Urban vs. Rural Rental Markets

The rental market itself has varied between Iowa’s cities and rural areas. In small towns, there are relatively few rentals (and those that exist might be single-family homes or duplexes). In the bigger cities, there’s a substantial rental sector, and it saw its own ups and downs.

During the 2010s, a wave of new apartment construction in places like Des Moines and Cedar Rapids helped alleviate what had been very tight rental conditions. For example, the Des Moines metro’s rental vacancy rate fell from about 8.6% in 2010 to around 6.1% by the early 2020s, signaling a shift from a somewhat oversupplied market to a balanced rental market.

Cedar Rapids similarly added many apartments in 2018–2019, which eased the crunch that renters there had faced a few years prior. By 2020, most Iowa cities had a healthy equilibrium where renters could find units, though high demand still meant low vacancies in desirable locations. Average rents crept upward alongside home prices (for instance, the typical apartment in Cedar Rapids rented for about $719/month in early 2021, up slightly from a year earlier).

Affordability Challenges

While Iowa’s rents remain relatively affordable compared to national averages, the affordability issue hasn’t disappeared. According to the Iowa Finance Authority, about one-quarter of Iowa households struggle to pay their housing costs, whether rent or mortgage. This is a reminder that even as homebuying trends flourish, ensuring enough affordable housing (to rent or buy) is an ongoing challenge.

Conclusion

Overall, the period from 2009 to 2018 laid the foundation with a steady recovery in Iowa’s housing market, and 2020 to 2024 brought unprecedented twists – a pandemic buying spree, rapid price gains, and then a cooling off. Urban and rural areas each felt these trends in different ways. Cities rode the highs and lows more dramatically, while rural areas saw gentler changes.

Iowans upsized into bigger homes when they could, occasionally downsized when it suited their lifestyle, and even picked up a few lake cabins along the way. And through it all, whether in a downtown Des Moines loft or a farmhouse on the prairie, having a place to call home remained as important as ever.

References

Related Posts