For decades, the pitch for residents and companies alike to move to the Midwest has been simple: the affordability of homes, even in the region’s largest metros.
The pitch has worked. In the Columbus, Ohio, area — dubbed the Silicon Heartland — major tech firms like Intel and the defense technology manufacturer Anduril have invested billions of dollars that could create thousands of jobs. And Chicago is casting itself as the world leader in quantum computing, with a major hub taking shape on the city’s South Side.
But as the Midwest continues to attract tech-fueled investment and jobs, policymakers, advocates and residents in the region say this development could deepen a tension in many Midwestern housing markets between affordability and the scarcity of homes. They worry that the housing shortage could ultimately bottleneck the region’s growth.
“I would, any day of the week, rather live in Ohio than live in Silicon Valley,” Carlie Boos, executive director of the Affordable Housing Alliance of Central Ohio, said.
The artificial intelligence boom that boosted tech companies and showered their workers with windfall pay — with some pay packages in the millions — is already affecting the Bay Area and New York City markets, pushing home prices up further.
“We are not at that place. A lot of our work as advocates is avoiding falling into that trap, but our home prices have more than doubled in just 10 years, so that rate of inflation is really, really concerning,” Boos said.
After the 2008 financial crisis brought homebuilding across the country to a near halt, the Midwest never fully recovered, and the strong demand since the pandemic only made markets tighter.
In Columbus, Boos said the housing market has reached a place where there is a “complete evaporation” of homes for first-time buyers and significant rent increases that outpace wage growth. The median sales price of homes in the area has risen 4.6% to $340,000 this year despite inventory growth, according to data from Columbus Realtors.
Martin Davis, a longtime Columbus resident who recently sold his first house in Clintonville in north Columbus to size up for his family, experienced the housing market firsthand: “People just throw stupid amounts of money [at it].”
The starter home Davis and his wife purchased for $240,000 in 2015 sold for $475,000, said Davis, who works in the tech industry. Meanwhile, his offer of $680,000 on a $600,000 home went through only after the top bidder dropped out. “It’s absolutely bananas.”
Davis said it’s not uncommon for buyers to offer $50,000 above the listing price, and most homes in the area stay on the market for only a few days if they don’t require significant work.
Based on projected job growth, central Ohio needs around 20,000 new homes per year, and the region isn’t adding enough homes to maintain the status quo, let alone improve the affordability that the Midwest is historically known for, Boos said.
“The goal should be to grow our housing market to serve the needs of the people that live here today and want to live here tomorrow,” Steve Stivers, president and CEO of the Ohio Chamber of Commerce, said. “Housing is going to be our limit, our constraining factor, if we do nothing in Columbus and the central Ohio region.”
Indeed, the housing shortage, exacerbated by the forecasted job growth, has prompted the city of Columbus to act. Columbus issued building permits for more than 9,000 housing units in 2025, the most since 2000, said Erin Prosser, the city’s deputy director of housing strategies. Through its Affordable Housing Bond, Columbus has also created or preserved 7,000 affordable housing units since 2019.
Prosser said the city is also deep in an effort to modernize its zoning code through the Zone In initiative, which aims to improve neighborhood density, utilize underused sites and increase the diversity of housing supply. About 4% of the city, along its major corridors, has been rezoned, with about 45% on track for rezoning by the end of 2026, focusing on commercial and industrial lots.
According to Prosser, a key motivation for Columbus to be proactive is the track record of other booming cities that reacted too late and “lost that real traction on the supply side.”
“The question for a lot of us in the coming decades is just how do we build cities in a way that continues to be livable and affordable and continue to keep families here and wanting to be part of our workforce,” Prosser said. “It’s an interesting challenge, especially here in the city of Columbus, where we’re seeing that renewed interest in our growth.”
For some Columbus homebuyers, the improvement in housing supply couldn’t come soon enough. Sharon Evanko, who recently retired from a job in the banking industry, was on the market for a house closer to the city core. When she was researching the market back in September, Evanko said she saw many homes around $380,000, but after she secured a mortgage this March, homes in that price range for the area she was looking at no longer existed.
For months, Evanko went to open houses and eventually made three offers that were $10,000 to $15,000 higher than the listing prices, but none were successful — the winning offers were $50,000 more. She eventually decided to put her homebuying on pause and signed a one-year lease on a house instead.
The experience “has shifted my whole thought process of buying a home in Columbus,” Evanko said. “I’m not looking forward to getting back into the market in a year. I don’t know what the housing inventory will be like then.”
Similarly, in Chicago, the housing market has been heating up, as the supply shortage intensifies competition and pushes up prices. In June, the metro’s median sales price was nearly $407,000, a 4.6% increase in a year, while the number of homes for sale was down 14.4%, according to data from Illinois Realtors.
“Low supply has been a problem citywide for a long time. And every year, I think, ‘Wow, could it get any worse?’ And then it just does,” said Mike McElroy, a real estate agent and board director of the Chicago Association of Realtors. “Unfortunately, it’s gonna take a while to dig out of the supply hole that we’re in right now, just because it has been so difficult to build in Chicago for so long.”
When Google and later McDonald’s relocated to Chicago’s West Loop about a decade ago, McElroy said home prices in the surrounding neighborhoods surged. But as developers seized on the demand and created more housing in the area, prices eventually stabilized.
Google is slated to move again soon, this time to the Thompson Center in the Central Loop, which has for years been bleeding office workers and retailers to other parts of the city. Business leaders and developers are betting that the move, along with projects to convert vacant offices into apartments and hotel rooms, will reinvigorate the neighborhood with new residents and businesses.
Historically, Chicago’s diverse economy and the absence of a dominating industry — unlike its coastal counterparts — have shielded the city from industry-specific market shocks, said Geoff Smith, executive director and principal investigator at the Institute for Housing Studies at DePaul University. But that also meant the city has not seen significant growth tied to the fortune of any specific sector.
Because of this, housing demand spurred by one employer or sector is likely noticeable at the neighborhood level, rather than the entire city, Smith said.
A market Smith has been watching is in Chicago’s South Lakefront area, where billions of dollars are slated for building a quantum computing hub to develop and commercialize the novel technology. The new investment, along with housing demand from the University of Chicago and infrastructure and amenities projects, will likely push up housing demand and prices, Smith said.
For McElroy, job growth opportunities like these are another reason to make it easier to build housing in Chicago by cutting red tape, streamlining permitting and expanding the construction of additional dwelling units — secondary units on the same lot as existing housing.
“Fortunately, Chicago is still much more affordable than those other markets,” McElroy said. “But we need to make sure that we’re doing the things that will allow us to maintain that affordability edge that we have over some other places if we want to continue to attract jobs.”
Although the Midwest’s affordability story has largely held up until now, market conditions like those in Columbus and Chicago are emerging as cracks in that story, said Jason Reece, a city and regional planning professor and administrator at The Ohio State University. The key, he said, will be if there’s preemptive action to increase housing supply before the situation reaches crisis level.
“At some point, particularly in certain markets, that argument’s not going to hold up anymore,” Reece said. “We attract economic activity because of the affordability of our housing and the quality of life. When those scales get tipped out of balance, that could impact the economic attractiveness of our region.”
This development comes at an already perilous time for homebuyers and renters. The cost of homeownership — borrowing, taxes, insurance and maintenance — is surging along with home prices, while wage growth lags.
This has made more people, especially those looking to purchase their first home, hesitant to commit to what has historically been the cornerstone of wealth building. Fewer than one in four Americans under 40 say buying a home is a very good investment, according to a May 2026 Pew Research Center survey, while the median age of first-time buyers has climbed to 40 years, an all-time high, said the National Association of Realtors.
Back in Columbus, Davis, the tech worker, said he sees the housing market mirroring the post-pandemic K-shaped economy, where the wealth gap between rich and poor Americans continues to expand.
“I don’t see how the housing market could get any better,” Davis said. “I get why the younger generations are losing hope.”
