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