Homebuyers in nearly half of the country need to earn at least six figures to be able to purchase a home.
Nationally, the typical household would need to earn $99,000 to buy a median-priced home of $415,500 in February, according to the most recent Realtor.com® data.
This also accounts for property taxes and insurance costs, and assumes a 10% down payment.
“For many people who want to buy a house, it’s just not feasible right now,” says Realtor.com senior economic research analyst Hannah Jones.
“Even for households that can afford a home, the monthly cost is going to be much higher than it was two, three, four years ago.”
That’s because home prices have surged since the COVID-19 pandemic and mortgage rates went from the mid-2% to the high 6% range.
In 23 states, buyers needed to earn at least $100,000 to avoid paying more than 30% of their gross income on housing.
Homeowners who pay more than that percentage are generally considered cost-burdened.
However, the typical household income in America was only about $75,000 in 2022, according to the U.S. Census Bureau.
A household includes all adults who live in the same home, including couples, multigenerational families, and roommates.
Nationally, the typical household would need to earn $99,000 to buy a median-priced home of $415,500 in February, according to the most recent Realtor.com data.Angelov – stock.adobe.com
“The majority of households could not afford to purchase a home,” says Jones.
Buyers in Hawaii, where the typical home was listed at $850,000, needed the highest household income of at least $202,526 to afford a property.
However, in West Virginia, it was possible to buy a home on a $55,039 household income.
The state had the lowest median home prices in the nation of just $231,000 in February.
“Buying a home is always an important financial undertaking,” says Jones.
This also accounts for property taxes and insurance costs and assumes a 10% down payment.Smole – stock.adobe.com
“The financial impact has only grown over the last few years thanks to higher mortgage rates and climbing home prices. A lot of households are spending more of their income on housing than they were in the past.”
To come up with the state findings, Realtor.com analyzed median monthly mortgage payments in every state.
The calculation uses median home list prices from February and a 6.78% mortgage rate for a 30-year fixed loan, and includes estimated property taxes and insurance costs.
It also assumes buyers put down 10% and didn’t spend more than 30% of their gross income on their mortgage payments each month.
States where buyers need the highest incomes to purchase homes
1. Hawaii
Median home list price in February: $850,000
Median household income required to purchase a home: $202,526
2. Massachusetts
Median home list price: $777,500
Median household income required to purchase a home: $185,251
3. California
Median home list price: $730,000
Median household income required to purchase a home: $173,934
4. New York
Median home list price: $652,520
Median household income required to purchase a home: $155,473
5. Washington
Median home list price: $619,500
Median household income required to purchase a home: $147,606
6. Montana
Median home list price: $602,475
Median household income required to purchase a home: $143,549
7. Utah
Median home list price: $599,450
Median household income required to purchase a home: $142,828
8. Colorado
Median home list price: $594,500
Median household income required to purchase a home: $141,649
9. New Hampshire
Median home list price: $562,450
Median household income required to purchase a home: $134,012
10. Idaho
Median home list price: $554,500
Median household income required to purchase a home: $132,118
States where buyers need the lowest incomes to purchase homes
1. West Virginia
Median home list price in February: $231,000
Median household income required to purchase a home: $55,039
2. Ohio
Median home list price: $249,900
Median household income required to purchase a home: $59,543
3. Michigan
Median home list price: $259,900
Median household income required to purchase a home: $61,925
4. Louisiana
Median home list price: $275,000
Median household income required to purchase a home: $65,523
5. Mississippi
Median home list price: $278,898
Median household income required to purchase a home: $66,452
6. Indiana
Median home list price: $280,750
Median household income required to purchase a home: $66,893
7. Pennsylvania
Median home list price: $285,378
Median household income required to purchase a home: $67,996
8. Missouri
Median home list price: $291,250
Median household income required to purchase a home: $69,395
9. Arkansas
Median home list price: $293,838
Median household income required to purchase a home: $70,011
10. Iowa
Median home list price: $294,750
Median household income required to purchase a home: $70,229
The 50 states and the median household income required to purchase a home
1. Alabama: $76,826
2. Alaska: $94,472
3. Arizona: $119,922
4. Arkansas: $70,011
5. California: $730,000
6. Colorado: $594,500
7. Connecticut: $120,908
8. Delaware: $114,366
9. Florida: $109,364
10. Georgia: $91,720
11. Hawaii: $202,526
12. Idaho: $132,118
13. Illinois: $70,872
14. Indiana: $66,893
15. Iowa: $70,229
16. Kansas: $71,200
17. Kentucky: $71,349
18. Louisiana: $65,523
19. Maine: $100,310
20. Maryland: $93,281
21. Massachusetts: $185,251
22. Michigan: $61,925
23. Minnesota: $92,173
24. Mississippi: $66,452
25. Missouri: $69,395
26. Montana: $602,475
27. Nebraska: $83,393
28. Nevada: $114,606
29. New Hampshire: $134,012
30. New Jersey: $127,919
31. New Mexico: $92,480
32. New York: $652,520
33. North Carolina: $94,234
34. North Dakota: $80,093
35. Ohio: $59,543
36. Oklahoma: $70,467
37. Oregon: $130,867
38. Pennsylvania: $67,996
39. Rhode Island: $115,547
40. South Carolina: $83,369
41. South Dakota: $87,330
42. Tennessee: $102,688
43. Texas: $85,764
44. Utah: $599,450
45. Vermont: $116,920
46. Virginia: $100,697
47. Washington: $619,500
48. West Virginia: $55,039
49. Wisconsin: $89,296
50. Wyoming: $107,088
