A trailblazing report from Realtor.com shows that in nearly half of the U.S., the average four-person family doesn’t earn enough to afford monthly mortgage payments on a median-priced three-bedroom property. The state-by-state affordability analysis revealed that in 35 of the 50 states, including Washington D.C., a family of four “needs to pull in six figures to buy a home.” However, in 15 states, homeownership is still relatively affordable despite the current economic climate. Here are the highlights.
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15 states where you don’t need to make six figures:
Homebuying affordability is strongest in the Midwest—with nearly all states in the region having a recommended median income under $85K, with Minnesota ($110K) and Wisconsin ($109K) being the two main outliers.
Per the report, median four-person family incomes are between 49.8 percent and 51.9 percent higher than the minimum recommended income to buy a home in Illinois, Michigan, and Ohio.
Properties in the South are also relatively affordable, compared to those on the West Coast and in the Northeast. A handful of states don’t require a six-figure salary minimum, excluding South Carolina, Georgia, and Florida.
Perspective buyers who make less than six figures can afford a home in 15 states in the U.S., which is approximately 30 percent of the nation. States on this list include:
- Alabama ($93K)
- Arkansas ($83K)
- Illinois ($83K)
- Indiana ($80K)
- Iowa ($81K)
- Kansas ($81K)
- Kentucky ($86K)
- Louisiana ($79K)
- Michigan ($76K)
- Mississippi ($83K)
- Missouri ($83K)
- Ohio ($75K)
- Oklahoma ($85K)
- Pennsylvania ($85K)
- West Virginia ($71K)
“Affordable housing in these states means that families can spend a bit more on other necessities or can save more, taking some pressure off the all-too-familiar budget dance,” said Realtor.com senior economic research analyst Hannah Jones.
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The top 10 most expensive states to buy a home:
Hawaii, Massachusetts, and California are ranked the top three least affordable states to buy a four-person home; in all three states, it’s suggested that your family’s combined income exceeds $200K.
But as Realtor.com points out, most residents make well below the recommended amount. For instance, the median income in California for a four-person household is 38.7 percent lower than what’s deemed necessary.
“These figures factor in a rate of 6.65 percent on a 30-year fixed mortgage, property taxes, and insurance, and assume a 10 percent down payment. It’s important to note that homeowners who spend more than 30 percent of their gross income on housing are typically considered cost-burdened,” says the report.
That said, here are the top 10 most expensive states to buy a home:
- California ($210K)
- Hawaii ($229K)
- Idaho ($163K)
- Massachusetts ($216K)
- Montana ($177K)
- Nevada ($140K)
- New Mexico ($112K)
- New York ($190K)
- Oregon ($158K)
- Utah ($169K)
“Hawaii and California are among the nation’s most expensive states. Even though the typical four-person family income in these states is relatively high, it pales in comparison to home prices,” said Jones in the report.
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Each state’s median household income recommended for purchasing property:
- Alabama: $92,583
- Alaska: $121,585
- Arizona: $140,578
- Arkansas: $83,440
- California: $209,643
- Colorado: $161,002
- Connecticut: $143,729
- Delaware: $137,986
- Florida: $125,182
- Georgia: $109,354
- Hawaii: $229,341
- Idaho: $163,153
- Illinois: $83,440
- Indiana: $80,418
- Iowa: $80,562
- Kansas: $80,662
- Kentucky: $86,044
- Louisiana: $79,138
- Maine: $129,340
- Maryland: $117,505
- Massachusetts: $215,816
- Michigan: $76,361
- Minnesota: $109,627
- Mississippi: $83,426
- Missouri: $83,167
- Montana: $176,513
- Nebraska: $99,836
- Nevada: 139,742
- New Hampshire: $165,456
- New Jersey: $156,822
- New Mexico: $112,146
- New York: $189,923
- North Carolina: $114,951
- North Dakota: $104,555
- Ohio: $74,663
- Oklahoma: $84,892
- Oregon: $158,276
- Pennsylvania: $85,397
- Rhode Island: $151,067
- South Carolina: $101,426
- South Dakota: $107,196
- Tennessee: $120,855
- Texas: $102,160
- Utah: $168,693
- Vermont: $143,168
- Virginia: $121,534
- Washington: $174,700
- West Virginia: $71,080
- Wisconsin: $109,196
- Wyoming: $132,297
Content shared from bestlifeonline.com.