Owning a home is a dream for many Americans, but in today’s market, it can feel out of reach. Across the U.S., the gap between what people earn and how much homes cost has grown wider, making it harder for the average family to afford a house.
According to Realtor.com, the income needed to buy a typical home in the U.S. is 7% to 151% higher than the average income in most states. With mortgage rates near 7%, the economic pressure on buyers has only gotten worse.
Buying a median-priced home today is challenging, if not impossible, for households earning the median income, notes Hannah Jones, a senior economic research analyst at Realtor.com.
In 36 out of 50 states, you’d need to make at least six figures to buy a home without stretching your budget too thin.
The Most and Least Affordable States
Most Affordable: Illinois is currently the most affordable state for buying a home relative to income. Here the minimum income required to buy a median-priced home is just 7% above the state’s median household income of $80,306.
Least Affordable: Montana leads in the affordability gap with buyers needing an annual income of $178,017 to afford a median-priced home. That’s 151% more than the state’s median household income of $70,800.
Hawaii vs. West Virginia: The Extremes of Affordability
Hawaii has the highest median home prices in the nation: a typical house costs $800,000. To afford it, buyers would need to earn $235,588 annually—more than 147% higher than the state’s median income.
Meanwhile, West Virginia has a more accessible housing market. The median home price there is $249,000, requiring a minimum income of $73,327, still 30% higher than the state’s median income.
What It Takes to Buy a Home
Realtor.com’s calculations are based on:
- A 10% down payment
- A 6.93% mortgage rate for a 30-year fixed loan
- Monthly payments not surpassing 30% of gross income
- Estimated property taxes and insurance
States Requiring the Highest and Lowest Incomes To Buy a Home
Top 5 States Where You Need the Most Income
- Hawaii: $235,588 (Median home price: $800,000)
- Massachusetts: $215,696
- California: $210,557
- New York: $189,207
- Montana: $178,017
Top 5 States Where You Need the Least Income
- West Virginia: $73,327 (Median home price: $249,000)
- Ohio: $74,358
- Michigan: $79,128
- Louisiana: $80,969
- Iowa: $82,117
Income needed to afford a median-priced home in each state
- Alabama: $94,000
- Alaska: $122,211
- Arizona: $140,470
- Arkansas: $85,695
- California: $210,557
- Colorado: $166,370
- Connecticut: $146,161
- Delaware: $141,335
- Florida: $127,343
- Georgia: $113,495
- Hawaii: $235,588
- Idaho: $164,750
- Illinois: $86,122
- Indiana: $82,427
- Iowa: $82,117
- Kansas: $83,549
- Kentucky: $88,051
- Louisiana: $80,969
- Maine: $129,397
- Maryland: $117,793
- Massachusetts: $215,696
- Michigan: $79,128
- Minnesota: $110,403
- Mississippi: $85,239
- Missouri: $85,371
- Montana: $178,017
- Nebraska: $99,831
- Nevada: $142,369
- New Hampshire: $165,512
- New Jersey: $159,744
- New Mexico: $114,555
- New York: $189,207
- North Carolina: $117,573
- North Dakota: $103,055
- Ohio: $74,358
- Oklahoma: $85,401
- Oregon: $161,967
- Pennsylvania: $87,168
- Rhode Island: $147,228
- South Carolina: $103,070
- South Dakota: $108,930
- Tennessee: $124,832
- Texas: $105,868
- Utah: $173,744
- Vermont: $145,770
- Virginia: $121,461
- Washington: $176,669
- West Virginia: $73,327
- Wisconsin: $107,769
- Wyoming: $135,463
The National Picture
The national median home price is $402,500, requiring an income of $118,530—52% more than the average household earns. In 36 states, homebuyers need to earn six figures to afford a home. For many Americans, homeownership isn’t just about saving for a down payment anymore; it’s about making enough to afford monthly payments in the first place. If you’re dreaming of a home, it’s essential to plan your finances and explore affordable markets.
