There are only 14 states in the US where residents with incomes under $75,000 can buy a median-priced home. a new Bankrate analysis reveals.
That number has dropped from 36 in just four years, showing how rising home prices have tilted the balance of home ownership. targeting the wealthiest Americans.
Considering that half of the country's households earn one average $74,580 or lessThese 14 states are among the few places where the average person can afford to buy a conventional home.
To calculate the cost of homeownership in each U.S. state, Bankrate assumes a 20% down payment, no homeowners association (HOA) fees or mortgage insurance, and a 30-year fixed mortgage interest rate. year is 7.05%. Monthly mortgage payments for each state based on median sales price data from online broker Redfin.
Below is a list of the 14 states with the most affordable homes, based on the annual income needed to cover the cost of homeownership without spending. more than 28% about housing.
- Mississippi: $63,043
- Ohio: $64,071
- Arkansas: $64,714
- Indiana: $65,143
- Kentucky: $65,186
- Iowa: $65,314
- Oklahoma: $65,443
- Michigan: $66,343
- Missouri: $66,986
- Louisiana: $67,886
- Alabama: $69,514
- Kansas: $72,343
- North Dakota: $73,414
- West Virginia: $74,957
Median-priced homes in these states cost $300,000 or less, a significant drop from the U.S. median price of $402,343.
While these 14 states may have cheaper real estate available, there are still trade-offs to consider, such as poverty rate is higher and there are fewer good-paying jobs than in the rest of the country. Many of them are among the most rural in America, and incomes in rural areas tend to be lower than in large metropolitan cities.
By contrast, you'd need to earn $197,057 to buy a median-priced home worth $739,200 in California — highest among all states.
The median income needed to buy a home in the US overall is $110,871 – up from $76,191 in 2020. This is largely due to a persistent housing shortage exacerbated by restrictions on supply chains during the early stages of the pandemic. Since 2020, the median home price has increased by 27%while mortgage interest rates have nearly as twice as.
However, price increases are even more impressive in states with long-term home buying demand, such as California and New York. Home prices in rural or Rust Belt states like Mississippi or Michigan have not increased as much as elsewhere, making them relatively more affordable for people with middle-class incomes.
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