With housing prices soaring, it can be tough to buy a home even if you make a good salary. However, some states are more expensive than others. Several states have unaffordable homes that would be extremely difficult for most people to buy.
Some states have more reasonable housing prices so that people have a better chance of buying. According to Best Brokers, these states have the best ratio of personal income per capita to the median price of homes.
Methodology
For this report, the team at BestBrokers analyzed U.S. housing market data for 2023 provided by Redfin, one of the country’s largest national real estate brokerages. The dataset offers insights into the monthly median sales prices of various property types in every state. They calculated each state’s median price for all residential properties throughout the year and included that number in their analysis.
Additionally, they used data from the U.S. Bureau of Economic Analysis, providing every state’s personal income figures for the third quarter of 2023. These figures are shown in millions of dollars, seasonally adjusted at annual rates, and encompass the entire state’s income. To get the actual income per capita, they divided the income of each state by its population.
Finally, they determined the price-to-income ratio for each state by dividing its median home prices for the entire 2023 by the per capita personal income and ranked the states accordingly. They also calculated the income as a percentage of the median home price. As for the homes sold per 1,000 people figure, they divided the total number of properties sold in 2023 in every state by its population and then multiplied by 1000.
North Dakota
When you want to buy a home, you have a better chance of it in North Dakota than anywhere else. The personal income per capita is about $73,000, and the median home price is more than $262,000, giving it a ratio of 3.59- the lowest in the country.
Iowa
Coming in slightly behind North Dakota is Iowa. Salaries aren’t bad, and housing prices are very low. The average salary is about $62,000. The median home price is almost $225,000, giving the state a ratio of 3.62.
Illinois
High wages and relatively low home prices have given this state a ratio of wages to home prices of 3.75. Home prices average almost 268,000, and wages have a median of about $71,400.
Ohio
Ohio doesn’t have the highest average income per capita, but then its houses are dirt cheap. The average salary is about $60,500, and the median price of a house is about $229,000.
Pennsylvania
Pennsylvania has a little higher home prices, but they make up for it with higher salaries. The income per capita there is about $68,000. Median home prices are about $271,000 for a ratio of 3.99.
Michigan
Some of the least expensive houses can be found in Michigan. It has a median home price of about $241,000, and salaries are an average of about $60,000. That gives the state a ratio of 4.02.
Missouri
The Show-Me State has a per capita income of about $61,400. The median price of homes is rather reasonable at about $248,000. This gives the state a respectable ratio of 4.03.
Kansas
If you don’t like mountains and want to buy a home, Kansas may be your ideal spot. The median home price there is almost $260,000. Salaries average at about $64,000. Kansas’ ratio is 4.05.
Oklahoma
The Sooner State is a place with relatively low average salaries, but the homes are also low. The average salary per capita is almost $59,000, and the median home price is only $238,000. That’s a 4.05 ratio.
Indiana
Indiana homes tend to be affordable at a median price of about $245,000. The average income per capita is about $60,000. This gives the state a ratio of 4.08 which signifies high affordability.
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