This Is the Salary You Need To Afford the Average Home in Your State
Before you buy a home, it's important to find out if you can afford the monthly mortgage payment.
Read: Tips To Get Your Mortgage Payments as Low as Possible
See: 32 Insider Tips for Buying and Selling a House
To do this, 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.
Last updated: June 18, 2021
Alabama: $36,760
Monthly mortgage payment: $919
Monthly income needed: $3,063.33
Alabamians enjoy a lower cost of living, with home prices well below the national average. In fact, another GOBankingRates study found Alabama is one of the few states where it costs about the same to own or rent a home.
See: The Salary You Need To Afford Rent in Every State
Alaska: $51,320
Monthly mortgage payment: $1,283
Monthly income needed: $4,276.67
Alaska is one of the most expensive places to live, typically 40% above the national average.
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Arizona: $50,880
Monthly mortgage payment: $1,272
Monthly income needed: $4,240
An earlier GOBankingRates study found Arizona to be one of the popular states for millennial homebuyers because of its affordable home values. The average salary required to purchase a home is not among the lowest, however.
Arkansas: $31,320
Monthly mortgage payment: $783
Monthly income needed: $2,610
If you want to stretch your home-buying dollar, Arkansas is a great place to do it, another GOBankingRates study indicates.
Read: Best States To Buy a $300K House
California: $89,280
Monthly mortgage payment: $2,232
Monthly income needed: $7,440
California is one of the most expensive places to buy a home, with Zillow predicting home prices will increase even more. The average home price in the state is $495,000.
Learn: How Real Estate in California Differs From Every Other State
Colorado: $73,600
Monthly mortgage payment: $1,840
Monthly income needed: $61,333.33
Colorado is the fifth most expensive place to purchase a home, found a separate GOBankingRates study, and requires one of the highest average salaries. The average home price is $405,000.
Connecticut: $55,360
Monthly mortgage payment: $1,384
Monthly income needed: $4,613.33
Although the cost of homes in Connecticut is above average, it's one of the best states for first-time home buyers.
Delaware: $51,040
Monthly mortgage payment: $1,276
Monthly income needed: $4,253.33
Delaware housing prices are slightly more affordable than bordering states. The average home price in the state is $275,000.
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District of Columbia: $97,280
Monthly mortgage payment: $2,432
Monthly income needed: $8,106.67
Housing costs in D.C. are 134.6% more in the nation's capital than any state in the country, found a separate study. The average home price is over a half million dollars -- $535,000 to be exact.
Florida: $52,640
Monthly mortgage payment: $1,316
Monthly income needed: $4,386.67
Florida is one of the best states to retire rich. The average home price is $285,000 in the Sunshine State.
Georgia: $44,760
Monthly mortgage payment: $1,119
Monthly income needed: $3,730
Georgia offers some of the most affordable housing in the country. The average home price is just $239,000.
Hawaii: $110,520
Monthly mortgage payment: $2,763
Monthly income needed: $9,210
Hawaii requires the highest annual salary to own a home. However, Hawaii is also one of the states where people are making more money compared to residents in other states.
Idaho: $51,560
Monthly mortgage payment: $1,289
Monthly income needed: $4,296.67
Idaho has one of the more modest average rates on 30-year fixed mortgages at 4.33 percent. In comparison, the highest rate -- 4.38% APR -- is in Vermont and West Virginia.
Illinois: $37,840
Monthly mortgage payment: $946
Monthly income needed: $3,153.33
The average cost of purchasing a home in Illinois is much less than average, making it one of the cheapest places to live.
Indiana: $31,320
Monthly mortgage payment: $783
Monthly income needed: $2,610
Indiana is one of the best places to buy a home, with the minimum salary to buy a house at just $31,320.
Iowa: $32,400
Monthly mortgage payment: $810
Monthly income needed: $2,700
Iowa also is one of the cheapest places to purchase a home, with a median list price of only $169,000. That's why the salary needed to own a home is only $32,400.
Kansas: $31,760
Monthly mortgage payment: $794
Monthly income needed: $2,646.67
Kansas requires one of the lowest average salaries for purchasing a home, and the average mortgage payment in the state is under $800.
Kentucky: $32,600
Monthly mortgage payment: $815
Monthly income needed: $2,716.67
Kentucky ranks among the most affordable places to live. The salary needed to buy a house is just $32,600.
Louisiana: $38,080
Monthly mortgage payment: $952
Monthly income needed: $3,173.33
Your dollars will stretch further in Louisiana -- it's one of the states where you're least likely to live paycheck to paycheck, partially thanks to lower housing costs.
Maine: $42,320
Monthly mortgage payment: $1,058
Monthly income needed: $3,526.67
Housing costs are a little more for those living in Maine. According to another GOBankingRates study, housing is generally 21.9% higher in the Pine Tree State.
Maryland: $54,920
Monthly mortgage payment: $1,373
Monthly income needed: $4,576.67
Over the last year, home values have risen slowly in Maryland. The median home price is just shy of $300,000, but where you choose to buy in the state is key to what you'll pay.
Massachusetts: $75,360
Monthly mortgage payment: $1,884
Monthly income needed: $6,280
When comparing the average home price by state, Massachusetts ranks among the highest in the country. The median list price is $415,000, according to the study.
Michigan: $30,680
Monthly mortgage payment: $767
Monthly income needed: $2,556.67
Michigan has the third-lowest annual salary needed. And its typical mortgage payments are well below average.
Minnesota: $46,720
Monthly mortgage payment: $1,168
Monthly income needed: $3,893.33
In Minnesota, the minimum salary needed to buy a home is less than $50,000. However, the median home value is expected to rise nearly 4% within the next year -- which could mean the minimum salary needed to own a home might increase.
Mississippi: $33,120
Monthly mortgage payment: $828
Monthly income needed: $2,760
Mississippi is among the most affordable states to own a home with mortgage payments that are well below average.
Missouri: $31,800
Monthly mortgage payment: $795
Monthly income needed: $2,650
Home-buying dollars also go far in Missouri, where the average income required is only $31,800. The median price of a home is $165,000.
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Montana: $55,640
Monthly mortgage payment: $1,391
Monthly income needed: $4,636.67
Although not the costliest place to live, Montana does require a bit more than some of its bordering states. The median home price in the state is $299,999.
Nebraska: $37,040
Monthly mortgage payment: $926
Monthly income needed: $3,086.67
Nebraska housing prices are among the best in the country. The median home price is only $195,000.
Nevada: $55,680
Monthly mortgage payment: $1,392
Monthly income needed: $4,640
Home prices in Nevada have risen steadily in the last few years. Nevada is also one of the states being hit hard by the foreclosure crisis, according to another GOBankingRates study.
New Hampshire: $51,720
Monthly mortgage payment: $1,293
Monthly income needed: $4,310
It costs a little more in New Hampshire to afford the average home, although another GOBankingRates study found the state to be one of the best places in the country to live a richer life.
New Jersey: $51,720
Monthly mortgage payment: $1,293
Monthly income needed: $4,310
The median home list price in New Jersey has fallen over the last couple of months. At the time of the study, it was $279,900 -- nearly $20,000 less than the median price in November 2017.
New Mexico: $40,960
Monthly mortgage payment: $1,024
Monthly income needed: $3,413.33
The average salary to afford a home in New Mexico is lower than in more than half the states.
New York: $63,360
Monthly mortgage payment: $1,584
Monthly income needed: $5,280
Your home-buying money won't go in New York, as the annual salary required to own a home in the state is $63,360. As for the median home price, you'll spend about $345,000.
North Carolina: $46,600
Monthly mortgage payment: $1,165
Monthly income needed: $3,883.33
In North Carolina, home values have grown 6.6% over the past year, according to Zillow. And, it predicts values will continue to grow over 3% within the next year.
North Dakota: $54,480
Monthly mortgage payment: $1,362
Monthly income needed: $4,540
You'll typically need a salary of at least $54,480 to afford the average home in North Dakota.
Ohio: $28,800
Monthly mortgage payment: $720
Monthly income needed: $2,400
Ohio residents enjoy a low cost of living. You can own a typical home there on a $28,800 salary. That means the average home costs just under $150,000.
Oklahoma: $33,640
Monthly mortgage payment: $841
Monthly income needed: $2,803.33
Although not as cheap as Ohio, Oklahoma is still an affordable state to live. You'll only need a salary of $33,640 to own the average home in the state.
Oregon: $64,040
Monthly mortgage payment: $1,601
Monthly income needed: $5,336.67
You'll need to make a little more in Oregon to afford the average home, as it's one of the costliest states to live.
Pennsylvania: $35,760
Monthly mortgage payment: $894
Monthly income needed: $2,980
Pennsylvania is middle ground in terms of pricing and affordability when compared to other states. You can own a home, however, on a $35,760 income.
Rhode Island: $51,960
Monthly mortgage payment: $1,299
Monthly income needed: $4,330
The median home price in Rhode Island is $280,000. That's a little more expensive than the national average, requiring homebuyers in the state to make a bit more.
South Carolina: $44,800
Monthly mortgage payment: $1,120
Monthly income needed: $3,733.33
In the Palmetto State, the average salary needed to own a home is $44,800.
South Dakota: $40,880
Monthly mortgage payment: $1,022
Monthly income needed: $3,406.67
The average home has a mortgage payment of $1,022 in South Dakota, which is still on the low end. If you want to purchase a home as an investment property, do so in Rapid City, where the rental income potential is over $15,000 per year, found a separate GOBankingRates study.
Tennessee: $42,280
Monthly mortgage payment: $1,057
Monthly income needed: $3,523.33
Expect to pay more in Nashville to purchase the average home.
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Texas: $49,840
Monthly mortgage payment: $1,246
Monthly income needed: $4,153.33
You can make less than $50,000 and still be able to afford a home, found this study.
Utah: $61,840
Monthly mortgage payment: $1,546
Monthly income needed: $5,153.33
The median home list price in Utah is $337,500, which is on the higher end compared to other states. As a result, you'll need to make a minimum of nearly $62,000 to afford the typical home.
Vermont: $49,960
Monthly mortgage payment: $1,174
Monthly income needed: $3,913.33
Vermont can be a cheap alternative to other New England states. Home prices, however, have risen over the past few years.
Virginia: $53,400
Monthly mortgage payment: $1,335
Monthly income needed: $4,450
Virginia can be an affordable place to purchase a home, but you'll need to make more than $50,000 to afford the mortgage payments.
Washington: $64,200
Monthly mortgage payment: $1,605
Monthly income needed: $5,350
To live in Washington, you'll need a higher salary than residents in 45 other states to afford the typical home.
West Virginia: $29,240
Monthly mortgage payment: $731
Monthly income needed: $2,436.67
When considering the median home price by state, don't pass up West Virginia. The salary needed to afford a house -- just $29,240 -- makes the state one of the best bargains in the country.
Wisconsin: $36,040
Monthly mortgage payment: $901
Monthly income needed: $3,003.33
Wisconsin is also quite reasonable when comparing the median house price by state. The median list price is only $189,900.
Wyoming: $44,600
Monthly mortgage payment: $1,115
Monthly income needed: $3,716.67
If you want to live out West, Wyoming is certainly a relatively cheap place to live with a median home price of $237,500. Its neighbors Colorado and Utah have a median house price by state that's higher.
What’s the Salary You Need To Afford a House in Your State?
There are many financial factors to consider when you're choosing a home. The down payment, closing costs, property taxes, insurance -- the list goes on. However, it's also important to figure out if your salary is large enough to pay the mortgage payments.
Here are the five states that require the highest salaries to afford a home:
1. Hawaii: $110,520
2. District of Columbia: $97,280
3. California: $89,280
4. Massachusetts: $75,360
5. Colorado: $73,600
And here are the five states that require the lowest salaries to afford a home:
1. Ohio: $28,800
2. West Virginia: $29,240
3. Michigan: $30,680
4. Indiana: $31,320
5. Arkansas: $31,320
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Methodology: To find the minimum salary needed to own a home in every state (except North Dakota, whose median home list price information was sourced for Realtor.com) and the District of Columbia, GOBankingRates calculated the average mortgage payment in every state using the state's median home list price and the average APR on a 30-year fixed loan, sourced from Zillow. Using the general rule of thumb that no more than 30% of your income should go toward housing, we then calculated the annual income needed to afford the average mortgage payment in every state. The study results do not account for other home costs, such as property taxes or insurance. All information in this article is accurate at the time the study was conducted in November 2018.
This article originally appeared on GOBankingRates.com: This Is the Salary You Need To Afford the Average Home in Your State
