Find a Job You Really Want In
Purchasing a home remains one of the most significant milestones in a person’s life. It symbolizes stability and success, embodying a foundational aspect of the American Dream. However, with the evolving economic landscape, many individuals are discovering that their salaries may not suffice to support this aspiration. As of now, only 64% of the population are homeowners.
To help potential buyers understand what it takes to afford a home, we analyzed average home values and monthly payments across each state. If you’re looking to settle down, it’s crucial to know which states may pose financial challenges when it comes to homeownership.
The 10 Most Expensive States to Buy a House
In our analysis, we not only identified the most expensive states for homebuyers but also calculated the income necessary to afford a house in each state. Check out the table below to see where you stand.
How We Determined This
To assess housing affordability, we began by gathering average home values from the US Census. Although home prices can vary significantly within states, we used average figures to provide a broad overview of housing costs.
We utilized a standard 30-year mortgage at a 3.9% interest rate to calculate monthly payments, without factoring in PMI, taxes, down payment sizes, or home insurance, as these variables differ widely based on individual circumstances.
Next, we calculated the necessary annual salary for homeowners, ensuring that monthly mortgage payments would not exceed 28% of their gross income—a common guideline in personal finance.
Homebuyers with additional debts may need to aim for a lower percentage to avoid financial strain.
1. Hawaii
Salary Needed: $135,900
Median Home Price: $670,600
Average Monthly Payment: $3,171
Hawaii is renowned for its stunning landscapes and vibrant culture, but this paradise comes at a hefty cost. The median home price is $670,600, necessitating an annual salary of at least $135,900 to manage monthly payments of $3,171.
2. California
Salary Needed: $118,157
Median Home Price: $583,200
Average Monthly Payment: $2,757
California, with its diverse offerings from beaches to tech hubs, ranks second in housing costs. To afford a median-priced home of $583,200, you’ll need to earn at least $118,157 annually for a monthly mortgage payment of $2,757.
3. Massachusetts
Salary Needed: $86,143
Median Home Price: $425,100
Average Monthly Payment: $2,010
With its rich history and vibrant sports culture, Massachusetts is a desirable place to live, though affordability is a challenge. The median home price is $425,100, requiring an income of $86,143 for a monthly payment of $2,010.
4. Colorado
Salary Needed: $81,600
Median Home Price: $402,600
Average Monthly Payment: $1,904
Colorado’s breathtaking mountains are alluring, but home prices are steep. The average home costs $402,600, necessitating an annual salary of $81,600 to afford a monthly payment of $1,904.
5. Washington
Salary Needed: $80,914
Median Home Price: $399,400
Average Monthly Payment: $1,888
Washington, known for its coffee culture and scenic landscapes, ranks fifth in home affordability. With a median home price of $399,400, you’ll need to earn at least $80,914 for a monthly mortgage payment of $1,888.
6. Oregon
Salary Needed: $73,971
Median Home Price: $365,000
Average Monthly Payment: $1,726
Oregon’s stunning coastlines and mountain ranges come with a price. The average home costs $365,000, requiring an income of at least $73,971 to manage monthly payments of $1,726.
7. New York
Salary Needed: $73,114
Median Home Price: $360,900
Average Monthly Payment: $1,706
New York offers a wealth of opportunities but comes at a premium. The median home price is $360,900, which means you’ll need to earn at least $73,114 annually for a monthly payment of $1,706.
8. New Jersey
Salary Needed: $71,957
Median Home Price: $355,200
Average Monthly Payment: $1,679
New Jersey’s housing market can be daunting. With an average home price of $355,200, you’ll need to earn at least $71,957 for a monthly payment of $1,679.
9. Maryland
Salary Needed: $68,957
Median Home Price: $340,400
Average Monthly Payment: $1,609
Maryland is the ninth-most expensive state for homebuyers, with a median price of $340,400. To afford a home here, you’ll need an income of at least $68,957 for a monthly payment of $1,609.
10. Utah
Salary Needed: $68,357
Median Home Price: $337,300
Average Monthly Payment: $1,595
Utah is known for its picturesque landscape, but home prices can be challenging. The average home costs $337,300, requiring an annual salary of at least $68,357 for a monthly payment of $1,595.
Breaking the Bank to Live the American Dream
Achieving homeownership is a goal for many Americans, yet the reality is that increasing housing costs make this dream unattainable for some. Our research highlights the states where home prices are particularly high, necessitating substantial incomes to afford a home.
Fortunately, we also examined the least expensive states and everything in between. Refer to the comprehensive table below for a complete overview of what to expect across the country.
The Most and Least Expensive States to Buy a House
| Rank | State | Salary Needed | Median Home Price | Average Monthly Payment |
|---|---|---|---|---|
| 1 | Hawaii | $135,900 | $670,600 | $3,171 |
| 2 | California | $118,157 | $583,200 | $2,757 |
| 3 | Massachusetts | $86,143 | $425,100 | $2,010 |
| 4 | Colorado | $81,600 | $402,600 | $1,904 |
| 5 | Washington | $80,914 | $399,400 | $1,888 |
| 6 | Oregon | $73,971 | $365,000 | $1,726 |
| 7 | New York | $73,114 | $360,900 | $1,706 |
| 8 | New Jersey | $71,957 | $355,200 | $1,679 |
| 9 | Maryland | $68,957 | $340,400 | $1,609 |
| 10 | Utah | $68,357 | $337,300 | $1,595 |
| 11 | Nevada | $66,214 | $326,800 | $1,545 |
| 12 | Virginia | $63,429 | $313,100 | $1,480 |
| 13 | Alaska | $60,386 | $298,000 | $1,409 |
| 14 | New Hampshire | $58,843 | $290,300 | $1,373 |
| 15 | Connecticut | $57,729 | $284,800 | $1,347 |
| 16 | Rhode Island | $57,000 | $281,200 | $1,330 |
| 17 | Arizona | $55,586 | $274,300 | $1,297 |
| 18 | Montana | $55,500 | $273,800 | $1,295 |
| 19 | Delaware | $54,343 | $268,200 | $1,268 |
| 20 | Idaho | $54,086 | $266,900 | $1,262 |
| 21 | Florida | $52,971 | $261,400 | $1,236 |
| 22 | Minnesota | $52,286 | $258,100 | $1,220 |
| 23 | Wyoming | $49,371 | $243,600 | $1,152 |
| 24 | Vermont | $49,071 | $242,100 | $1,145 |
| 25 | Texas | $46,671 | $230,400 | $1,089 |
| 26 | North Dakota | $46,071 | $227,400 | $1,075 |
| 27 | Illinois | $45,386 | $224,000 | $1,059 |
| 28 | Georgia | $45,086 | $222,600 | $1,052 |
| 29 | Maine | $43,543 | $214,900 | $1,016 |
| 30 | North Carolina | $43,500 | $214,700 | $1,015 |
| 31 | Pennsylvania | $42,686 | $210,700 | $996 |
| 32 | Tennessee | $42,257 | $208,600 | $986 |
| 33 | Wisconsin | $41,571 | $205,200 | $970 |
| 34 | South Carolina | $41,271 | $203,600 | $963 |
| 35 | South Dakota | $40,543 | $200,100 | $946 |
| 36 | New Mexico | $39,771 | $196,300 | $928 |
| 37 | Louisiana | $38,614 | $190,500 | $901 |
| 38 | Nebraska | $37,971 | $187,400 | $886 |
| 39 | Michigan | $37,414 | $184,600 | $873 |
| 40 | Missouri | $36,557 | $180,400 | $853 |
| 41 | Kansas | $36,429 | $179,700 | $850 |
| 42 | Alabama | $34,114 | $168,300 | $796 |
| 43 | Iowa | $33,943 | $167,500 | $792 |
| 44 | Kentucky | $33,814 | $166,800 | $789 |
| 45 | Ohio | $33,557 | $165,500 | $783 |
| 46 | Indiana | $33,129 | $163,400 | $773 |
| 47 | Oklahoma | $32,571 | $160,800 | $760 |
| 48 | Mississippi | $31,457 | $155,200 | $734 |
| 49 | West Virginia | $31,286 | $154,500 | $730 |
| 50 | Arkansas | $30,943 | $152,800 | $722 |
Author
Kathy is the head of content at Zippia with a knack for engaging audiences. Prior to joining Zippia, Kathy worked at Gateway Blend growing audiences across diverse brands. She graduated from Troy University with a degree in Social Science Education.
