- Overview
A new study by the University of Mississippi places New Orleans at the very bottom of 100 U.S. housing markets, highlighting major economic, demographic, and environmental challenges weighing on the city’s real estate sector.
- Key Findings
a. Weak Home Price Growth
Inflation-adjusted home prices are ~14% below long-term trend, limiting wealth-building potential for homeowners.
b. Population Decline
The metro area has lost 3.3% of its population in the past decade, reducing demand and housing market stability.
c. Rental Market Strain
Rents are ~1.7% above historical norms, leaving both renters and buyers under affordability pressure.
d. Poor Affordability Rankings
WalletHub’s 2025 ranking:
292nd out of 300 cities for first-time homebuyers.
Low scores in affordability (213th), market conditions (195th), and quality of life (295th).
e. High Carrying Costs
Many households spend more on insurance and property taxes than on their mortgages, due to rising premiums and levies.
f. Flood & Climate Risks
~80% of listings face significant flood risk, the highest in the U.S.
Climate change is expected to erode long-term property values and push insurance premiums higher.
- Comparative Insights
Unlike markets with strong in-migration and rising property values, New Orleans struggles with out-migration, high insurance costs, and extreme weather exposure.
Its price-to-rent ratio (17%), below the national average, could hint at future appreciation if systemic risks are addressed.
- Implications
For Buyers: Opportunities to buy at below-trend prices, but long-term risks (insurance, climate, resale).
For Sellers: Potential difficulty attracting buyers, especially in high-risk flood zones.
For Policymakers: Urgent need to address insurance affordability, flood mitigation, and population retention.
- Conclusion
New Orleans’ real estate market faces structural weaknesses tied to both economic fundamentals and climate risks. Without intervention, the city risks long-term decline in housing demand, affordability, and investment confidence.
