Housing
Since the onset of the COVID-19 pandemic, the United States has faced a significant housing affordability crisis. According to the S&P CoreLogic Case-Shiller US National Home Price Index, housing costs have skyrocketed by 53% between January 2020 and September 2024. This surge is driven by broad economic factors such as supply constraints, increasing demand, and higher borrowing costs, impacting millions of American households.
With incomes failing to keep pace, the median home price now stands at 4.9 times the median household income—up from a price-to-income ratio of 3.1 in 1990. This widening gap has priced many Americans out of the housing market and increased the number of individuals burdened by housing costs.
Financial experts typically advise spending no more than 30% of pre-tax income on housing. However, from 2019 to 2022, the number of Americans stretching beyond this recommendation grew by three million. As home prices and mortgage rates reach record highs, potential homebuyers must navigate the market carefully.
To shed light on the regions most affected by high housing costs, we’ve compiled a list of the top 10 most expensive states based on median home prices. Using data from Realtor.com for October 2024, we considered the median listing prices across all 50 states. Additionally, we factored in mortgage rates from the Federal Reserve, property tax rates from the Tax Foundation, and average homeowners insurance premiums reported by Bankrate. Our analysis estimates the annual income required to comfortably afford a median-priced home in these states, assuming no more than 28% of annual earnings are allocated to housing expenses. These figures are estimates and exclude the savings needed for a down payment.
In some regions, particularly in the Northeast and along the West Coast, the cost of homeownership requires an annual income exceeding $175,000. Here are the top 10 most expensive states where buying a home demands the highest financial commitment.
- Minimum annual income needed to afford a typical home: $142,889 (15th highest of 50 states)
- Est. monthly expenses for a typical home: $3,334 (15th highest of 50 states)
- Median home list price in October 2024: $572,988 (10th highest of 50 states)
- Avg. annual homeowners insurance premium: $107 (14th lowest of 50 states)
- Est. annual property tax payments: $2,668 (18th lowest of 50 states)
- Effective property tax rate: 0.5% (7th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $175,922 (5th highest of 50 states)
- Est. monthly expenses for a typical home: $4,105 (5th highest of 50 states)
- Median home list price in October 2024: $574,500 (9th highest of 50 states)
- Avg. annual homeowners insurance premium: $97 (8th lowest of 50 states)
- Est. annual property tax payments: $11,942 (the highest of 50 states)
- Effective property tax rate: 2.1% (the highest of 50 states)
- Minimum annual income needed to afford a typical home: $154,869 (10th highest of 50 states)
- Est. monthly expenses for a typical home: $3,614 (10th highest of 50 states)
- Median home list price in October 2024: $595,000 (8th highest of 50 states)
- Avg. annual homeowners insurance premium: $268 (9th highest of 50 states)
- Est. annual property tax payments: $2,705 (20th lowest of 50 states)
- Effective property tax rate: 0.5% (5th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $149,036 (12th highest of 50 states)
- Est. monthly expenses for a typical home: $3,477 (12th highest of 50 states)
- Median home list price in October 2024: $599,000 (7th highest of 50 states)
- Avg. annual homeowners insurance premium: $100 (11th lowest of 50 states)
- Est. annual property tax payments: $2,836 (22nd lowest of 50 states)
- Effective property tax rate: 0.5% (8th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $167,404 (7th highest of 50 states)
- Est. monthly expenses for a typical home: $3,906 (7th highest of 50 states)
- Median home list price in October 2024: $644,450 (6th highest of 50 states)
- Avg. annual homeowners insurance premium: $119 (17th lowest of 50 states)
- Est. annual property tax payments: $4,891 (13th highest of 50 states)
- Effective property tax rate: 0.8% (25th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $170,482 (6th highest of 50 states)
- Est. monthly expenses for a typical home: $3,978 (6th highest of 50 states)
- Median home list price in October 2024: $646,975 (5th highest of 50 states)
- Avg. annual homeowners insurance premium: $211 (15th highest of 50 states)
- Est. annual property tax payments: $4,490 (15th highest of 50 states)
- Effective property tax rate: 0.7% (18th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $187,954 (4th highest of 50 states)
- Est. monthly expenses for a typical home: $4,386 (4th highest of 50 states)
- Median home list price in October 2024: $649,775 (4th highest of 50 states)
- Avg. annual homeowners insurance premium: $145 (24th lowest of 50 states)
- Est. annual property tax payments: $9,998 (2nd highest of 50 states)
- Effective property tax rate: 1.5% (6th highest of 50 states)
- Minimum annual income needed to afford a typical home: $194,364 (2nd highest of 50 states)
- Est. monthly expenses for a typical home: $4,535 (2nd highest of 50 states)
- Median home list price in October 2024: $759,500 (3rd highest of 50 states)
- Avg. annual homeowners insurance premium: $123 (18th lowest of 50 states)
- Est. annual property tax payments: $5,152 (11th highest of 50 states)
- Effective property tax rate: 0.7% (17th lowest of 50 states)
- Minimum annual income needed to afford a typical home: $207,469 (the highest of 50 states)
- Est. monthly expenses for a typical home: $4,841 (the highest of 50 states)
- Median home list price in October 2024: $769,500 (2nd highest of 50 states)
- Avg. annual homeowners insurance premium: $139 (22nd lowest of 50 states)
- Est. annual property tax payments: $8,000 (5th highest of 50 states)
- Effective property tax rate: 1.0% (17th highest of 50 states)
- Minimum annual income needed to afford a typical home: $191,046 (3rd highest of 50 states)
- Est. monthly expenses for a typical home: $4,458 (3rd highest of 50 states)
- Median home list price in October 2024: $798,500 (the highest of 50 states)
- Avg. annual homeowners insurance premium: $100 (11th lowest of 50 states)
- Est. annual property tax payments: $2,045 (6th lowest of 50 states)
- Effective property tax rate: 0.3% (the lowest of 50 states)
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