10 Best and 10 Worst States for Millennials To Buy a Home
As mortgage rates continue to climb, many millennials may find themselves frustrated that the current real estate climate will make it too difficult for them to become homeowners. The silver lining, however, is that while there are some states where it is expensive and time-consuming to save money and buy a home, this is not true of every state.
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To find out which states offer millennials the best, and worst, in home affordability, GOBankingRates evaluated the median home value for each state in conjunction with each state’s median income for people ages 25 to 34. Assuming millennials put away 20% of their salary each month to save for a down payment, we calculated how long it would take to afford a 20% down payment on a house with the median home value for each state. The estimated monthly mortgage payment was also factored in, using the current national average for a 30-year, fixed rate mortgage.
Read on to discover which 10 states are the best, as well as 10 states among the worst, for millennials who want to buy a home.
Best States for Millennials To Buy a Home
The 10 states which rank as the best for millennials to buy a home all have monthly mortgage payments for under $1,300. Two states, including Mississippi and West Virginia, stand out for their mortgage payments costing homeowners less than $1,000 each month.
In ascending order from lowest to highest monthly mortgage payment, here are the top 10 states where millennials do not need to go into tremendous debt to become homeowners.
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West Virginia
Median income: $65,724
Monthly income: $5,477
20% towards saving for down payment: $1,095
Median home value: $155,080
Mortgage down payment (20%): $31,016
Loan amount: $124,064
Months to save for down payment: 28.31
Years to save: 2.4
Monthly mortgage payment: $815
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Mississippi
Median income: $58,241
Monthly income: $4,853
20% towards saving for down payment: $971
Median home value: $170,653
Mortgage down payment (20%): $34,131
Loan amount: $136,523
Months to save for down payment: 35.16
Years to save: 2.9
Monthly mortgage payment: $897
Iowa
Median income: $80,820
Monthly income: $6,735
20% towards saving for down payment: $1,347
Median home value: $212,367
Mortgage down payment (20%): $42,473
Loan amount: $169,894
Months to save for down payment: 31.53
Years to save: 2.6
Monthly mortgage payment: $1,117
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Kentucky
Median income: $69,951
Monthly income: $5,829
20% towards saving for down payment: $1,166
Median home value: $196,412
Mortgage down payment (20%): $39,282
Loan amount: $157,130
Months to save for down payment: 33.69
Years to save: 2.8
Monthly mortgage payment: $1,033
Louisiana
Median income: $67,420
Monthly income: $5,618
20% towards saving for down payment: $1,124
Median home value: $195,240
Mortgage down payment (20%): $39,048
Loan amount: $156,192
Months to save for down payment: 34.75
Years to save: 2.9
Monthly mortgage payment: $1,027
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Oklahoma
Median income: $68,367
Monthly income: $5,697
20% towards saving for down payment: $1,139
Median home value: $200,153
Mortgage down payment (20%): $40,031
Loan amount: $160,122
Months to save for down payment: 35.13
Years to save: 2.9
Monthly mortgage payment: $1,052
Kansas
Median income: $78,703
Monthly income: $6,559
20% towards saving for down payment: $1,312
Median home value: $217,817
Mortgage down payment (20%): $43,563
Loan amount: $174,253
Months to save for down payment: 33.21
Years to save: 2.8
Monthly mortgage payment: $1,145
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Ohio
Median income: $75,413
Monthly income: $6,284
20% towards saving for down payment: $1,257
Median home value: $218,535
Mortgage down payment (20%): $43,707
Loan amount: $174,828
Months to save for down payment: 34.77
Years to save: 2.9
Monthly mortgage payment: $1,149
Arkansas
Median income: $63,883
Monthly income: $5,324
20% towards saving for down payment: $1,065
Median home value: $198,364
Mortgage down payment (20%): $39,673
Loan amount: $158,691
Months to save for down payment: 37.26
Years to save: 3.1
Monthly mortgage payment: $1,043
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Michigan
Median income: $76,819
Monthly income: $6,402
20% towards saving for down payment: $1,280
Median home value: $230,125
Mortgage down payment (20%): $46,025
Loan amount: $184,100
Months to save for down payment: 35.95
Years to save: 3.0
Monthly mortgage payment: $1,210
Worst States for Millennials To Buy a Home
The following 10 states ranked in the bottom half of the worst states for millennials to buy homes due to having increasingly expensive monthly mortgage payments. Hawaii ranks in 51st place with the highest monthly mortgage payment out of any state at $5,086 each month.
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Nevada
Median income: $75,908
Monthly income: $6,326
20% towards saving for down payment: $1,265
Median home value: $441,049
Mortgage down payment (20%): $88,210
Loan amount: $352,839
Months to save for down payment: 69.72
Years to save: 5.8
Monthly mortgage payment: $2,319
Montana
Median income: $77,250
Monthly income: $6,438
20% towards saving for down payment: $1,288
Median home value: $449,576
Mortgage down payment (20%): $89,915
Loan amount: $359,661
Months to save for down payment: 69.84
Years to save: 5.8
Monthly mortgage payment: $2,364
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Oregon
Median income: $87,664
Monthly income: $7,305
20% towards saving for down payment: $1,461
Median home value: $494,672
Mortgage down payment (20%): $98,934
Loan amount: $395,737
Months to save for down payment: 67.71
Years to save: 5.6
Monthly mortgage payment: $2,601
Utah
Median income: $91,937
Monthly income: $7,661
20% towards saving for down payment: $1,532
Median home value: $519,376
Mortgage down payment (20%): $103,875
Loan amount: $415,501
Months to save for down payment: 67.79
Years to save: 5.6
Monthly mortgage payment: $2,731
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Colorado
Median income: $96,255
Monthly income: $8,021
20% towards saving for down payment: $1,604
Median home value: $550,945
Mortgage down payment (20%): $110,189
Loan amount: $440,756
Months to save for down payment: 68.69
Years to save: 5.7
Monthly mortgage payment: $2,897
Washington
Median income: $101,586
Monthly income: $8,466
20% towards saving for down payment: $1,693
Median home value: $589,240
Mortgage down payment (20%): $117,848
Loan amount: $471,392
Months to save for down payment: 69.60
Years to save: 5.8
Monthly mortgage payment: $3,098
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Massachusetts
Median income: $110,567
Monthly income: $9,214
20% towards saving for down payment: $1,843
Median home value: $615,963
Mortgage down payment (20%): $123,193
Loan amount: $492,770
Months to save for down payment: 66.85
Years to save: 5.6
Monthly mortgage payment: $3,239
District of Columbia (DC)
Median income: $118,096
Monthly income: $9,841
20% towards saving for down payment: $1,968
Median home value: $718,017
Mortgage down payment (20%): $143,603
Loan amount: $574,414
Months to save for down payment: 72.96
Years to save: 6.1
Monthly mortgage payment: $3,775
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California
Median income: $99,703
Monthly income: $8,309
20% towards saving for down payment: $1,662
Median home value: $785,333
Mortgage down payment (20%): $157,067
Loan amount: $628,267
Months to save for down payment: 94.52
Years to save: 7.9
Monthly mortgage payment: $4,129
Hawaii
Median income: $96,571
Monthly income: $8,048
20% towards saving for down payment: $1,610
Median home value: $967,270
Mortgage down payment (20%): $193,454
Loan amount: $773,816
Months to save for down payment: 120.19
Years to save: 10.0
Monthly mortgage payment: $5,086
Methodology: To determine millennial home affordability, GOBankingRates evaluated median home value for each state in conjunction with each state’s median income for people ages 25 to 34. Assuming millennials put away 20 percent of their salary each month to save for a down payment on a home, GOBankingRates calculated (1) the amount of time it would take to afford a 20 percent down payment on a house with the median home value for each state. The (2) estimated monthly mortgage payment in every state was based on a 30-year, fixed-rate mortgage, with a fixed rate of 6.88% (the current national average according to the Federal Reserve Bank of St. Louis). Those two numbers– the time to save for a down and the mortgage payment amount– were scored to develop the final state affordability ranking. All data was collected on and up to date as of April 11, 2024.
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This article originally appeared on GOBankingRates.com: 10 Best and 10 Worst States for Millennials To Buy a Home
