It’s no secret that recent rising costs have made home ownership more difficult for buyers, and the new Bankrate report only adds fuel to the (financial) fire. The report, released April 1, concluded that Americans need to earn $110,871 a year to buy a home at the average median price (which sells for $402,343, according to Redfin data). This is a whopping 46% increase from 2020, which is a tough road for potential buyers in an already tough market and doesn’t include money in savings to buy a home.
As of January 2020, the number of states where you need to make $100,000 or more a year to afford a median-priced home has increased from seven to 22, plus the District of Columbia.
California tops the list of states where you have to earn the highest salary to afford a home. If you want to buy a median-priced home in the Golden State, you’ll need to earn $197,057, according to Bankrate. A recent USA Today survey, updated March 2024, found that in California, the cost of living accounts for 77.2% of the average resident’s income. Hawaii was listed as the second most expensive in the Bankrate report, requiring homeowners to earn $185,829. In third place was the District of Columbia, where homeowners need to earn $167,871 a year.
Here are the 10 most expensive states on Bankrate’s list.
According to Bankrate’s report, states in the Midwest and South ranked as the states with the highest affordability — especially for first-time homebuyers. So if you’re trying to decide where to move, consider the state in those areas. Mississippi currently requires the lowest income to afford a home ($63,043), followed by Ohio ($64,071), Arkansas ($64,714) and Indiana ($65,143).
You can read Bankrate’s full report here.