As home price appreciation cools nationwide in the aftermath of rapid pandemic-era gains, valuations in some low-income communities across the U.S. are posting outsized increases.

Analyzing first-quarter trends in more than 3,400 census tracts that qualify for tax-advantaged investment under the Tax Cuts and Jobs Act (TCJA) passed in 2017, real estate market analytics firm Attom says home prices rose by double digits in nearly one-third of those designated Opportunity Zones.

Across all such zones analyzed, median single-family home and condo prices rose year over year in nearly 45%, roughly in line with the 47% of non-Opportunity Zone census tracts that posted annual median home price gains in the first quarter.

While this signals homes inside the tracts were “slightly less likely to experience price growth than those outside the zones,” the report noted price behavior in Opportunity Zones has continued to mirror national trends, offering evidence of resilience in the broader housing market.

“That’s a good sign, since these areas, which have historically been under-invested in, can be bellwethers for changes in the broader housing market’s trajectory,” said Attom CEO Rob Barber in commentary accompanying the findings. 

Opportunity Zones are areas defined in the TCJA as census tracts in or abutting low-income neighborhoods that meet certain redevelopment criteria. Their designation aims to spur economic growth and job creation in low-income communities while providing tax benefits for investors.

As a result of the underinvestment noted by Barber, home values inside Opportunity Zones tend to be “significantly lower” than national benchmarks.

For example, the national median home sale price in the first quarter was $360,000, according to Attom data. But only about one-fifth of tracts inside the zones posted median home values at or exceeding that national figure, compared to roughly half of census tracts outside the zones.

But while Opportunity Zones experienced a slightly lower overall growth rate than the rest of the country, 30.8% of census tracts inside the zones posted at least 10% home price growth year over year, compared to 28.6% of tracts outside the zones that saw double-digit growth.