The median price of a home in America is $402,343. According to Bankrate, the median household income necessary to own it is $110,871. That is up by 46% since early 2020. That shows how fast home prices have risen since the start of the pandemic. No one can say with certainty exactly why this has happened. To some extent, working from home has driven up prices as people relocate to places in the South and mountain states.
The income needed to own a home has certainly changed because of interest rates. The monthly mortgage payment on a home priced at $450,000 has risen from $1,900 two years ago to $2,900 recently because mortgage rates have risen from 3% to 7%. According to Bankrate, “A surge in mortgage rates has caused the income needed to afford a median-priced home to increase everywhere nationwide.”
The salary needed to own a home tends to be high in states with median household incomes above the national level. The highest median household income states are Maryland, Massachusetts, the District of Columbia, New Jersey, New Hampshire, California, Hawaii, and Washington. The states where people need the highest income to own a home are California, Hawaii, the District of Columbia, Massachusetts, Washington, Colorado, and New Jersey. (These are the cheapest and most expensive places to buy a house in Illinois.)
In California, the cost of owning a home is just below $200,000, at $197,057. Hawaii is next at $185,829. The figure is at most $170,000 in any other state. The two most expensive states were also on the list four years ago. Bankrate experts wrote, “Four years ago, only the District of Columbia and six states — California, Hawaii, Massachusetts, New York, New Jersey and Washington — required a six-figure salary to afford a typical home.”
The 10 Most Expensive States in Which to Own a Home
- California ($197,057)
- Hawaii ($185,829)
- District of Columbia ($167,871)
- Massachusetts ($162,471)
- Washington ($156,814)
- Colorado ($152,229)
- New Jersey ($152,186)
- New York ($148,286)
- Utah ($133,886)
- Rhode Island ($132,343)
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