{"id":189165,"date":"2026-08-27T12:31:58","date_gmt":"2026-08-27T18:31:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=189165"},"modified":"2026-08-27T12:32:02","modified_gmt":"2026-08-27T18:32:02","slug":"midwest-markets-are-dominating-2026-but-there-are-drawbacks","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/midwest-markets-are-dominating-2026-but-there-are-drawbacks","title":{"rendered":"The Midwest Is Dominating 2026 Real Estate Rankings\u2014But the Drawbacks Matter"},"content":{"rendered":"

If there were a U.S. championship for the best places to invest, <\/span>the<\/span> Midwest <\/span>would see its cities<\/span> grab gold, silver, and bronze medals.<\/span> Not only have cities in the American heartland dominated the recent <\/span>Wall Street Journal<\/span><\/em>\/Realtor.com<\/span> Summer 2026 Housing Market Ranking<\/span><\/a> for the most popular places to live, but they have also consistently dominated<\/span> BiggerPockets\u2019 Pulse cash flow surveys<\/span><\/a>.<\/span><\/p>\n

However, all that glitters is not gold (silver or bronze). <\/span>Before you throw a dart <\/span>on<\/span> a map of the Midwest and charge off to buy <\/span>some<\/span> rentals, it’s worth noting that not all cities in the region are created equal, and the balance between employment demand and supply is crucial to <\/span>enjoying<\/span> a fruitful landlording experience.<\/span> Demand can be mercurial, with cities moving up and down the leaderboard like players in a game of Chutes and Ladders.<\/span><\/p>\n

Rental Yields Can Be Misleading<\/span><\/h2>\n

With interest rates snaking back up to<\/span> near 7%<\/span><\/a>, affordability has never been more important, as most investors struggle to make the numbers work with conventional leverage strategies. Threading the needle between high rents and low prices to make houses worth considering buying leaves only a few options.<\/span><\/p>\n

Detroit, Cleveland, St. Louis, Milwaukee, and Indianapolis all rank among the country\u2019s top 10 highest-yielding rental markets, according to a recent analysis by<\/span> Leading Landlord<\/span><\/a> using Zillow home value and rent data. However, the numbers often overlook a larger story: House prices are so affordable because demand to live there is traditionally lower than in coastal counterparts due to employment opportunities, and rental yields can be misleading.\u00a0<\/span><\/p>\n

Recent political policies have made the situation fluid. \u201cWith immigration having largely been stopped \u2026 the labor force is growing very slowly,\u201d Dean Baker, co-founder of the Center for Economic and Policy Research, wrote in a <\/span>post<\/span><\/a> as quoted by<\/span> The Guardian<\/span><\/a><\/em>.\u00a0<\/span><\/p>\n

U.S. employers unexpectedly lost 23,000 jobs in July, with gains from the previous two months revised downward. \u201cHowever, slower wage growth, even in the face of rising inflation, indicates it is not a very good labor market for most workers. That story does not seem likely to change anytime soon,\u201d Baker wrote in the post.\u00a0<\/span><\/p>\n

Jobs Create Tenants: Follow the Money<\/span><\/h2>\n

Landlords should pay particular attention to the jobs market because jobs create tenants, particularly in the Midwest, where blue-collar jobs have traditionally dominated. Thus, established metros are the safe bet.<\/span><\/p>\n

Reuters <\/span>reported<\/span><\/a> recently that Bank of America was adding senior investment bankers in Chicago, Detroit, and Minneapolis <\/span>in<\/span> an expansion <\/span>drive with<\/span> middle-market companies.<\/span><\/p>\n

Chicago remains the region\u2019s largest and most diversified economy, with employment spread across multiple industries. Elsewhere, Minneapolis-St. Paul; Cincinnati, Ohio; Milwaukee; Dayton, Ohio; and Indianapolis ranked highly on the<\/span> Monster Jobs Market Report<\/span><\/a>, thanks to stable employment sectors such as education, healthcare, finance, and tech.<\/span><\/p>\n

Vicki Salemi, a Monster career advice expert, said when commenting on the recent Monster Jobs report:\u00a0<\/span><\/p>\n

\u201cWhile healthcare remained the largest source of hiring demand, transportation, logistics, customer service, and sales also continued to generate significant employer activity. At the same time, several Midwest metros emerged among the fastest-growing hiring markets… suggesting hiring growth is broadening beyond many of the country\u2019s traditional employment hubs.\u201d<\/span><\/em><\/p>\n

Rural Areas Have High Cash Flow but Unstable Employment<\/span><\/h2>\n

Conversely, outside major Midwest metros, where house prices are most affordable, tariffs<\/span>, combined<\/span> with<\/span> ICE raids<\/span>, <\/span>have created employment problems, particularly on new construction projects.<\/span><\/p>\n

\u201cThe construction process has been slowing down,\u201d Amy Wright, a Fayette County, Georgia, resident, told<\/span> The Guardian<\/span><\/a><\/em> of an under-construction battery plant. \u201c<\/span>My fear is<\/span> that the whole thing is going to stop, and we\u2019re left with just unfinished concrete out there. Tariffs are affecting everything.\u201d<\/span><\/p>\n

In Indiana,<\/span> Reuters reports<\/span><\/a> that one of the state’s largest employers, the pharmaceutical company Roche, is rethinking its $50 billion investment plan because of the government\u2019s drug pricing policies.<\/span><\/p>\n

\u201cShould the proposed EO (Executive Order) go into effect, Roche’s ability to fund the significant investments previously announced in the U.S. will be in question,” the company said in a statement.\u00a0\u00a0<\/span><\/p>\n

Watch the Population Shifts<\/span><\/h2>\n

Employment isn\u2019t the only metric investors should <\/span>keep an eye on<\/span>. Population trends could signal a desire for affordability that could extend to remote workers. If <\/span>this is the case<\/span>, recent demographic shifts could be an encouraging sign for would-be investors.<\/span><\/p>\n

\u201cWhen you live in a place that\u2019s been losing population since the 1960s, to say out loud that we believe this place can stabilize and grow\u2026it landed on some ears as ridiculous,\u201d Kyle Kutuchief, a program director in Akron, Ohio, for the philanthropic Knight Foundation, told the<\/span> Wall Street Journal<\/span><\/a><\/em> regarding a tech start-up that recently took up residence in an abandoned B.F. Goodrich tire factory. \u201cAnd to now be at a place where we\u2019re leveling off and starting to tick up a little bit, it gives me goosebumps.\u201d<\/span><\/p>\n

The <\/span>Journal <\/span><\/em>quoted census numbers for the year ending in June that show the Midwest is gaining residents at a slightly higher rate than the rest of the country\u2014around 16,000\u2014a marked improvement from 2022, when it lost 175,000.<\/span><\/p>\n

Service-based economies are the biggest beneficiaries, according to the <\/span>Journal<\/span><\/em>, <\/span>such as<\/span> Indianapolis, Columbia, and Des Moines, as well as Cleveland and Akron, which have reinvented themselves <\/span>from<\/span> their manufacturing pasts.<\/span> Domestic moves, international migration, and the balance between births and deaths are among the biggest factors contributing to population change.<\/span><\/p>\n

Final Thoughts<\/span><\/h2>\n

While affordability plays a big part in making an area attractive to new residents, for landlords, <\/span>the metric of<\/span> house price versus potential rental income alone isn\u2019t enough to determine whether a place deserves your investment dollars. Yes, the Midwest tops most rankings based on those factors, but the calculations need to be a lot more nuanced than a \u201cTop Ten Cash-Flowing Cities\u201d headline.\u00a0<\/span><\/p>\n

For a landlord, news of a new manufacturing facility, hospital expansion, or corporate investment translates into more paychecks to support rents. And rents tend to go a lot further in the Midwest than elsewhere.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

If there were a U.S. championship for the best places to invest, the Midwest would see its cities grab gold, silver, and bronze medals. Not only have cities in the […]<\/p>\n","protected":false},"author":613725,"featured_media":185362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7364],"tags":[],"class_list":["post-189165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-markets"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/189165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=189165"}],"version-history":[{"count":3,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/189165\/revisions"}],"predecessor-version":[{"id":189169,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/189165\/revisions\/189169"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/185362"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=189165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=189165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=189165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}