This Is the Salary You Need To Afford the Average Home in Your State
Shopping for a home can be one of the most exciting and daunting life milestones. Before you shop for homes, it’s important to understand which mortgage rates are best and how much of a monthly payment you can afford. Both are based on how much income you make.
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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 owe each month. Depending on the state, that salary amount varies quite widely. For example, you only need to earn about $60,500 in Arkansas to buy an average home, whereas you’d have to earn almost $176,000 to afford one in Hawaii.
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.
Keep reading to find out what the cost of housing looks like in your home state.
Alabama: $64,163
2023 average home value: $201,212
Monthly mortgage payment: $1,058.61
Annual mortgage payments: $12,703
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Alaska: $106,279
2023 average home value: $357,035
Monthly mortgage payment: $2,065.86
Annual mortgage payments: $24,790
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Arizona: $96,344
2023 average home value: $420,605
Monthly mortgage payment: $2,304.00
Annual mortgage payments: $27,648
Arkansas: $60,487
2023 average home value: $176,107
Monthly mortgage payment: $963.21
Annual mortgage payments: $11,559
California: $148,908
2023 average home value: $748,161
Monthly mortgage payment: $4,148.16
Annual mortgage payments: $49,778
Colorado: $111,199
2023 average home value: $552,779
Monthly mortgage payment: $2,977.35
Annual mortgage payments: $35,728
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Connecticut: $103,999
2023 average home value: $379,101
Monthly mortgage payment: $2,427.31
Annual mortgage payments: $29,128
Delaware: $89,773
2023 average home value: $355,120
Monthly mortgage payment: $1,927.53
Annual mortgage payments: $23,130
Florida: $95,979
2023 average home value: $398,861
Monthly mortgage payment: $2,271.31
Annual mortgage payments: $27,256
Georgia: $80,105
2023 average home value: $307,375
Monthly mortgage payment: $1,750.34
Annual mortgage payments: $21,004
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Hawaii: $176,010
2023 average home value: $971,526
Monthly mortgage payment: $5,046.57
Annual mortgage payments: $60,559
Idaho: $97,916
2023 average home value: $438,088
Monthly mortgage payment: $2,418.02
Annual mortgage payments: $29,016
Illinois: $79,065
2023 average home value: $239,065
Monthly mortgage payment: $1,588.47
Annual mortgage payments: $19,062
Indiana: $69,677
2023 average home value: $221,357
Monthly mortgage payment: $1,247.60
Annual mortgage payments: $14,971
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Iowa: $70,093
2023 average home value: $201,546
Monthly mortgage payment: $1,246.79
Annual mortgage payments: $14,961
Kansas: $70,204
2023 average home value: $208,883
Monthly mortgage payment: $1,260.85
Annual mortgage payments: $15,130
Kentucky: $64,790
2023 average home value: $188,438
Monthly mortgage payment: $1,058.92
Annual mortgage payments: $12,707
Louisiana: $63,119
2023 average home value: $182,124
Monthly mortgage payment: $980.95
Annual mortgage payments: $11,771
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Maine: $93,928
2023 average home value: $347,071
Monthly mortgage payment: $2,074.73
Annual mortgage payments: $24,897
Maryland: $97,091
2023 average home value: $395,518
Monthly mortgage payment: $2,295.12
Annual mortgage payments: $27,541
Massachusetts: $131,536
2023 average home value: $576,102
Monthly mortgage payment: $3,391.02
Annual mortgage payments: $40,692
Michigan: $70,928
2023 average home value: $212,868
Monthly mortgage payment: $1,295.55
Annual mortgage payments: $15,547
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Minnesota: $87,301
2023 average home value: $320,005
Monthly mortgage payment: $1,872.93
Annual mortgage payments: $22,475
Mississippi: $59,413
2023 average home value: $160,346
Monthly mortgage payment: $878.35
Annual mortgage payments: $10,540
Missouri: $69,920
2023 average home value: $226,968
Monthly mortgage payment: $1,307.60
Annual mortgage payments: $15,691
Montana: $97,477
2023 average home value: $427,218
Monthly mortgage payment: $2,375.82
Annual mortgage payments: $28,510
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Nebraska: $76,661
2023 average home value: $242,560
Monthly mortgage payment: $1,522.75
Annual mortgage payments: $18,273
Nevada: $98,623
2023 average home value: $429,767
Monthly mortgage payment: $2,336.28
Annual mortgage payments: $28,035
New Hampshire: $116,962
2023 average home value: $442,930
Monthly mortgage payment: $2,909.82
Annual mortgage payments: $34,918
New Jersey: $117,735
2023 average home value: $460,761
Monthly mortgage payment: $3,122.95
Annual mortgage payments: $37,475
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New Mexico: $77,014
2023 average home value: $280,010
Monthly mortgage payment: $1,536.17
Annual mortgage payments: $18,434
New York: $101,804
2023 average home value: $396,058
Monthly mortgage payment: $2,410.47
Annual mortgage payments: $28,926
North Carolina: $82,358
2023 average home value: $309,902
Monthly mortgage payment: $1,741.49
Annual mortgage payments: $20,898
North Dakota: $76,476
2023 average home value: $245,226
Monthly mortgage payment: $1,404.61
Annual mortgage payments: $16,855
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Ohio: $70,976
2023 average home value: $206,508
Monthly mortgage payment: $1,291.26
Annual mortgage payments: $15,495
Oklahoma: $63,890
2023 average home value: $189,085
Monthly mortgage payment: $1,072.01
Annual mortgage payments: $12,864
Oregon: $114,269
2023 average home value: $491,744
Monthly mortgage payment: $2,812.52
Annual mortgage payments: $33,750
Pennsylvania: $78,695
2023 average home value: $243,386
Monthly mortgage payment: $1,503.60
Annual mortgage payments: $18,043
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Rhode Island: $106,613
2023 average home value: $421,742
Monthly mortgage payment: $2,584.36
Annual mortgage payments: $31,012
South Carolina: $75,950
2023 average home value: $272,103
Monthly mortgage payment: $1,470.12
Annual mortgage payments: $17,641
South Dakota: $79,649
2023 average home value: $283,596
Monthly mortgage payment: $1,678.74
Annual mortgage payments: $20,145
Tennessee: $75,947
2023 average home value: $287,793
Monthly mortgage payment: $1,583.67
Annual mortgage payments: $19,004
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Texas: $83,946
2023 average home value: $296,285
Monthly mortgage payment: $1,872.37
Annual mortgage payments: $22,468
Utah: $107,797
2023 average home value: $515,621
Monthly mortgage payment: $2,798.69
Annual mortgage payments: $33,584
Vermont: $97,731
2023 average home value: $327,908
Monthly mortgage payment: $2,115.93
Annual mortgage payments: $25,391
Virginia: $90,084
2023 average home value: $363,186
Monthly mortgage payment: $2,056.05
Annual mortgage payments: $24,673
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Washington: $123,625
2023 average home value: $577,876
Monthly mortgage payment: $3,276.26
Annual mortgage payments: $39,315
West Virginia: $60,980
2023 average home value: $145,893
Monthly mortgage payment: $787.02
Annual mortgage payments: $9,444
Wisconsin: $82,208
2023 average home value: $262,566
Monthly mortgage payment: $1,652.71
Annual mortgage payments: $19,833
Wyoming: $81,223
2023 average home value: $322,509
Monthly mortgage payment: $1,742.46
Annual mortgage payments: $20,910
Jami Farkas and Laura Beck 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 (6.27%) 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 all of 2022. Necessity costs were totaled using 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% of the total income needed, and the amount specified for discretionary spending is equal to 30% of the total income needed. All data was collected on and is up to date as of April 30, 2024.
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This article originally appeared on GOBankingRates.com: This Is the Salary You Need To Afford the Average Home in Your State
