This Is the Salary You Need To Afford the Average Home in Your State
Before you shop for a home, it’s important to find out just how much you can afford to pay for your monthly mortgage payment. Visiting a lender to get prequalified for a home loan is one of the first things you should do to learn the amount you might be eligible to borrow and the amount you’d owe each month.
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For you to own a home, and live comfortably, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30% of your monthly income. With this rule of thumb in mind, GOBankingRates looked at home prices and mortgage rates in every state and estimated the minimum salary needed to afford the average home.
Alabama: $64,222
2021 average home value: $201,656
Monthly mortgage payment: $1,059.68
Annual mortgage payments: $12,716
Alaska: $102,513
2021 average home value: $332,437
Monthly mortgage payment: $1,915.91
Annual mortgage payments: $22,991
Arizona: $98,929
2021 average home value: $441,026
Monthly mortgage payment: $2,402.08
Annual mortgage payments: $28,825
Arkansas: $60,151
2021 average home value: $174,123
Monthly mortgage payment: $949.82
Annual mortgage payments: $11,398
California: $153,805
2021 average home value: $785,652
Monthly mortgage payment: $4,344.58
Annual mortgage payments: $52,135
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Colorado: $114,889
2021 average home value: $490,848
Monthly mortgage payment: $3,145.02
Annual mortgage payments: $37,740
Connecticut: $102,703
2021 average home value: $372,658
Monthly mortgage payment: $2,380.62
Annual mortgage payments: $28,567
Delaware: $88,663
2021 average home value: $347,728
Monthly mortgage payment: $1,891.03
Annual mortgage payments: $22,692
Florida: $95,717
2021 average home value: $397,367
Monthly mortgage payment: $2,250.38
Annual mortgage payments: $27,005
Georgia: $79,932
2021 average home value: $308,459
Monthly mortgage payment: $1,749.44
Annual mortgage payments: $20,993
Hawaii: $181,266
2021 average home value: $1,012,084
Monthly mortgage payment: $5,267.80
Annual mortgage payments: $63,214
Idaho: $101,664
2021 average home value: $468,187
Monthly mortgage payment: $2,569.52
Annual mortgage payments: $30,834
Illinois: $82,274
2021 average home value: $262,698
Monthly mortgage payment: $1,730.71
Annual mortgage payments: $20,769
Indiana: $68,527
2021 average home value: $216,473
Monthly mortgage payment: $1,216.92
Annual mortgage payments: $14,603
Iowa: $68,353
2021 average home value: $190,046
Monthly mortgage payment: $1,166.55
Annual mortgage payments: $13,999
Kansas: $69,582
2021 average home value: $203,630
Monthly mortgage payment: $1,224.47
Annual mortgage payments: $14,694
Kentucky: $66,147
2021 average home value: $194,198
Monthly mortgage payment: $1,086.84
Annual mortgage payments: $13,042
Louisiana: $66,987
2021 average home value: $210,980
Monthly mortgage payment: $1,133.29
Annual mortgage payments: $13,600
Maine: $94,248
2021 average home value: $351,259
Monthly mortgage payment: $2,088.79
Annual mortgage payments: $25,065
Maryland: $98,650
2021 average home value: $407,849
Monthly mortgage payment: $2,360.73
Annual mortgage payments: $28,329
Massachusetts: $131,904
2021 average home value: $593,274
Monthly mortgage payment: $3,468.61
Annual mortgage payments: $41,623
Michigan: $73,093
2021 average home value: $228,841
Monthly mortgage payment: $1,381.80
Annual mortgage payments: $16,582
Minnesota: $88,607
2021 average home value: $332,282
Monthly mortgage payment: $1,934.40
Annual mortgage payments: $23,213
Mississippi: $60,159
2021 average home value: $162,815
Monthly mortgage payment: $890.85
Annual mortgage payments: $10,690
Missouri: $69,528
2021 average home value: $225,808
Monthly mortgage payment: $1,297.62
Annual mortgage payments: $15,571
Montana: $98,610
2021 average home value: $436,375
Monthly mortgage payment: $2,427.65
Annual mortgage payments: $29,132
Nebraska: $74,544
2021 average home value: $235,764
Monthly mortgage payment: $1,468.79
Annual mortgage payments: $17,625
Nevada: $103,420
2021 average home value: $466,756
Monthly mortgage payment: $2,526.66
Annual mortgage payments: $30,320
New Hampshire: $115,167
2021 average home value: $440,717
Monthly mortgage payment: $2,874.16
Annual mortgage payments: $34,490
New Jersey: $118,727
2021 average home value: $467,759
Monthly mortgage payment: $3,144.07
Annual mortgage payments: $37,729
New Mexico: $77,936
2021 average home value: $288,250
Monthly mortgage payment: $1,567.57
Annual mortgage payments: $18,811
New York: $97,524
2021 average home value: $367,223
Monthly mortgage payment: $2,214.32
Annual mortgage payments: $26,572
North Carolina: $82,239
2021 average home value: $310,569
Monthly mortgage payment: $1,738.12
Annual mortgage payments: $20,857
North Dakota: $79,735
2021 average home value: $277,872
Monthly mortgage payment: $1,578.28
Annual mortgage payments: $18,939
Ohio: $70,941
2021 average home value: $208,655
Monthly mortgage payment: $1,296.42
Annual mortgage payments: $15,557
Oklahoma: $62,647
2021 average home value: $177,979
Monthly mortgage payment: $1,003.49
Annual mortgage payments: $12,042
Oregon: $117,544
2021 average home value: $519,395
Monthly mortgage payment: $2,963.10
Annual mortgage payments: $35,557
Pennsylvania: $81,125
2021 average home value: $262,698
Monthly mortgage payment: $1,612.50
Annual mortgage payments: $19,350
Rhode Island: $108,176
2021 average home value: $432,324
Monthly mortgage payment: $2,632.09
Annual mortgage payments: $31,585
South Carolina: $77,599
2021 average home value: $283,988
Monthly mortgage payment: $1,530.19
Annual mortgage payments: $18,362
South Dakota: $79,878
2021 average home value: $287,137
Monthly mortgage payment: $1,693.12
Annual mortgage payments: $20,317
Tennessee: $75,930
2021 average home value: $289,085
Monthly mortgage payment: $1,581.75
Annual mortgage payments: $18,981
Texas: $84,601
2021 average home value: $303,546
Monthly mortgage payment: $1,906.24
Annual mortgage payments: $22,875
Utah: $114,938
2021 average home value: $570,266
Monthly mortgage payment: $3,086.99
Annual mortgage payments: $37,044
Vermont: $101,295
2021 average home value: $352,648
Monthly mortgage payment: $2,261.62
Annual mortgage payments: $27,139
Virginia: $91,220
2021 average home value: $372,792
Monthly mortgage payment: $2,104.99
Annual mortgage payments: $25,260
Washington: $128,641
2021 average home value: $619,223
Monthly mortgage payment: $3,496.48
Annual mortgage payments: $41,958
West Virginia: $59,660
2021 average home value: $136,981
Monthly mortgage payment: $738.09
Annual mortgage payments: $8,857
Wisconsin: $80,943
2021 average home value: $260,805
Monthly mortgage payment: $1,622.62
Annual mortgage payments: $19,471
Wyoming: $80,082
2021 average home value: $315,824
Monthly mortgage payment: $1,696.47
Annual mortgage payments: $20,358
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Jordan Rosenfeld contributed to the reporting for this article.
Methodology: For this piece GOBankingRates first surveyed monthly living expenses in all 50 states. The cost-of-living comparison included the following factors: (1) yearly mortgage by assuming 20% down payment, 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.29%) for every state and multiplying that by 12 (1 year), sourced from Zillow’s home value index and determined using CNET Mortgage Calculator formula; (2) annual necessities cost (grocery, utilities, healthcare, and transportation) by taking the 2021 Bureau of Labor Statistics consumer expenditure survey and factored out by the Missouri Economic Research and Information Center’s cost of living index for quarter 2 of 2022. Necessity costs were totaled the annual dollar cost of necessities in each state. This dollar amount for necessities was then doubled to find the (3) actual annual income needed to live comfortably in the state, assuming a person is following the 50-30-20 budgeting guideline, which requires an income double the cost of necessities. The amount of money specified for savings is equal to 20 percent of the total income needed, and the amount specified for discretionary spending is equal to 30 percent of the total income needed. All data was collected and is up to date as of September 28, 2022.
This article originally appeared on GOBankingRates.com: This Is the Salary You Need To Afford the Average Home in Your State
