Have you ever stared at a “For Sale” sign and wondered what it really takes to call that house your own? With home prices climbing and mortgage rates refusing to budge, buying a home in 2025 feels like chasing a dream that keeps slipping out of reach. I’ve been there, crunching numbers and daydreaming about a place to call mine, only to realize the gap between income and homeownership is wider than I thought. Across the U.S., the income needed to afford a median-priced home varies wildly, from a modest $71,080 in West Virginia to a jaw-dropping $229,341 in Hawaii. Let’s dive into what it takes to buy a home in every state, why some places are tougher than others, and what you can do to make your homeownership dreams a reality.
The State of Home Affordability in 2025
Homebuying isn’t just about finding the perfect house—it’s about making the math work. With mortgage rates hovering around 6.65% for a 30-year fixed loan and a persistent housing shortage, affordability is at an all-time low. According to recent economic research, you’d need a six-figure income to afford a median-priced three-bedroom home in 35 states. That’s a tough pill to swallow when the average household doesn’t always clear that hurdle. But what does “affordable” really mean? Experts suggest your housing costs—mortgage, taxes, insurance, and all—shouldn’t eat up more than 30% of your gross income. Let’s break down the numbers and see where things stand across the country.
Why Home Prices Vary So Much
Ever wonder why a cozy three-bedroom in Ohio costs a fraction of a similar home in California? It’s not just about square footage. Several factors drive these differences, and they hit your wallet in different ways. For starters, supply and demand play a huge role. States like Hawaii and California have limited land and high demand, pushing prices through the roof. Then there’s the cost of living—think property taxes, insurance, and even local wages. In places like Montana or Idaho, where urban sprawl meets rural charm, prices have spiked as remote workers flood in. It’s a perfect storm, and your paycheck might not be ready for it.
The housing market is a reflection of local economies, demand, and dreams colliding with reality.
– Economic analyst
I’ve always found it fascinating how geography shapes our financial realities. A friend in Iowa once bragged about her mortgage being less than my rent in a big city. It’s not just anecdotal—data backs this up. Let’s look at the priciest and most affordable states to understand what’s at play.
The Most Expensive States to Buy a Home
If you’re eyeing a home in one of these states, brace yourself—you’ll need a hefty income to make it work. These are the top five states where homeownership demands a salary far above the median household income. The numbers are based on a 30-year mortgage with a 10% down payment, factoring in taxes and insurance.
- Hawaii: Median home price: $796,947 | Income needed: $229,341 | Median household income: $133,656
- California: Median home price: $728,500 | Income needed: $209,643 | Median household income: $128,533
- Massachusetts: Median home price: $747,200 | Income needed: $215,816 | Median household income: $161,149
- New York: Median home price: $659,974 | Income needed: $189,923 | Median household income: $131,389
- Montana: Median home price: $613,375 | Income needed: $176,513 | Median household income: $111,516
Hawaii takes the crown as the least affordable state, and it’s not hard to see why. With median home prices nearing $800,000, you’d need to earn over 40% more than the average household to afford a three-bedroom home. I’ve visited Hawaii, and while the beaches are stunning, the price tags on homes are downright intimidating. California and Massachusetts aren’t far behind, where tech hubs and urban centers keep demand sky-high. Montana’s inclusion might surprise you, but its recent popularity among remote workers has driven prices up faster than local incomes can keep up.
The Most Affordable States for Homebuyers
On the flip side, some states offer a breath of fresh air for aspiring homeowners. In these places, the median household income is often 1.5 times what you need to afford a home, leaving room for other life expenses. Here’s where you can stretch your dollar the furthest.
- Ohio: Median home price: $259,450 | Income needed: $74,663 | Median household income: $113,435
- Michigan: Median home price: $265,350 | Income needed: $76,361 | Median household income: $114,456
- Illinois: Median home price: $289,950 | Income needed: $83,440 | Median household income: $125,022
- Iowa: Median home price: $279,950 | Income needed: $80,562 | Median household income: $120,308
- Pennsylvania: Median home price: $296,750 | Income needed: $85,397 | Median household income: $125,861
Ohio stands out as the most affordable state, where a modest $74,663 gets you a median-priced home. That’s a far cry from Hawaii’s demands. I’ve driven through Ohio’s small towns, and the charm of affordable homes with big yards is hard to beat. Michigan and Illinois benefit from stable economies and less intense demand, making them great options for first-time buyers. These states prove you don’t always need a six-figure salary to own a home—just the right zip code.
Income Needed in Every State: A Full Breakdown
Curious about your state? Below is a comprehensive list of the income required to afford a median-priced three-bedroom home in every U.S. state, ranked from highest to lowest. Compare these figures to your state’s median household income to gauge affordability. The bigger the gap, the tougher it is to buy.
| State | Median Home Price | Income Needed | Median Household Income |
| Hawaii | $796,947 | $229,341 | $133,656 |
| Massachusetts | $747,200 | $215,816 | $161,149 |
| California | $728,500 | $209,643 | $128,533 |
| New York | $659,974 | $189,923 | $131,389 |
| Montana | $613,375 | $176,513 | $111,516 |
| Washington | $607,800 | $174,700 | $139,828 |
| Utah | $586,300 | $168,693 | $120,187 |
| New Hampshire | $575,100 | $165,456 | $153,749 |
| Idaho | $566,950 | $163,153 | $106,407 |
| Colorado | $559,600 | $161,002 | $135,820 |
| Oregon | $550,200 | $158,276 | $119,432 |
| New Jersey | $545,300 | $156,822 | $157,404 |
| Rhode Island | $525,400 | $151,067 | $138,933 |
| Connecticut | $499,800 | $143,729 | $149,181 |
| Vermont | $497,900 | $143,168 | $132,356 |
| Arizona | $489,100 | $140,578 | $107,944 |
| Nevada | $486,200 | $139,742 | $99,819 |
| Delaware | $479,900 | $137,986 | $128,053 |
| Wyoming | $460,300 | $132,297 | $113,060 |
| Maine | $449,800 | $129,340 | $114,591 |
| Florida | $435,600 | $125,182 | $104,069 |
| Alaska | $423,100 | $121,585 | $131,159 |
| Virginia | $422,900 | $121,534 | $139,667 |
| Tennessee | $420,300 | $120,855 | $99,689 |
| Maryland | $408,700 | $117,505 | $151,138 |
| North Carolina | $399,900 | $114,951 | $109,590 |
| New Mexico | $390,100 | $112,146 | $83,592 |
| Minnesota | $381,400 | $109,627 | $141,903 |
| Georgia | $380,300 | $109,354 | $112,675 |
| Wisconsin | $379,800 | $109,196 | $122,571 |
| South Dakota | $372,900 | $107,196 | $113,008 |
| North Dakota | $363,700 | $104,550 | $122,543 |
| Texas | $355,300 | $102,160 | $108,866 |
| South Carolina | $352,900 | $101,426 | $102,244 |
| Nebraska | $347,300 | $99,836 | $121,455 |
| Alabama | $322,100 | $92,583 | $94,373 |
| Kentucky | $299,300 | $86,044 | $102,067 |
| Pennsylvania | $296,750 | $85,397 | $125,861 |
| Oklahoma | $295,300 | $84,892 | $91,528 |
| Illinois | $289,950 | $83,440 | $125,022 |
| Arkansas | $290,200 | $83,440 | $90,146 |
| Mississippi | $290,100 | $83,426 | $84,767 |
| Missouri | $289,300 | $83,167 | $105,914 |
| Kansas | $280,600 | $80,662 | $111,192 |
| Iowa | $279,950 | $80,562 | $120,308 |
| Indiana | $279,700 | $80,418 | $105,581 |
| Louisiana | $275,300 | $79,138 | $97,149 |
| Michigan | $265,350 | $76,361 | $114,456 |
| Ohio | $259,450 | $74,663 | $113,435 |
| West Virginia | $247,300 | $71,080 | $90,164 |
This table paints a clear picture: affordability is a spectrum. In states like West Virginia or Ohio, homeownership feels within reach for many. But in places like Hawaii or California, it’s a stretch even for high earners. I’ve always thought it’s a bit unfair how location can dictate so much of your financial future, but that’s the reality we’re working with.
How to Figure Out What You Can Afford
So, how do you know what’s realistic for you? It’s not just about your salary—it’s about your overall financial picture. Here’s a step-by-step guide to help you figure out what you can afford without losing sleep over your mortgage payments.
- Calculate Your Housing Budget: Stick to the 30% rule—your monthly housing costs shouldn’t exceed 30% of your gross income. For example, if you earn $100,000 a year, aim for $2,500 or less per month.
- Factor in All Costs: Don’t forget property taxes, homeowners insurance, and maintenance. These can add hundreds to your monthly bill.
- Check Your Down Payment: A 10% down payment is standard, but 20% avoids private mortgage insurance, saving you money long-term.
- Use a Mortgage Calculator: Plug in your income, interest rate, and loan term to estimate monthly payments. It’s eye-opening.
- Consider Your Lifestyle: If you’re in a pricey state, you might need to cut back on other expenses or save longer for that down payment.
I’ve played around with mortgage calculators myself, and let me tell you, it’s both humbling and motivating. Seeing the numbers in black and white forces you to get real about your goals. If you’re in a state like North Carolina, where $114,951 gets you a median-priced home, you might be closer than you think. But if you’re dreaming of California, it’s time to strategize.
Tips to Bridge the Affordability Gap
Feeling discouraged? Don’t be. There are ways to make homeownership more attainable, even in pricey states. Here are some practical tips to close the gap between your income and that dream home.
- Look for Down Payment Assistance: Many states offer programs for first-time buyers, especially if your income is below a certain threshold.
- Consider a Smaller Home: A two-bedroom or condo might be more affordable and still meet your needs.
- Boost Your Income: Side hustles or a career pivot could help you hit that six-figure mark.
- Relocate to a Cheaper State: If remote work is an option, states like Ohio or Michigan could be game-changers.
- Improve Your Credit Score: A higher score means better mortgage rates, lowering your monthly payments.
Homeownership is a marathon, not a sprint. Small steps today can lead to big wins tomorrow.
– Financial planner
Perhaps the most interesting aspect is how flexible you can be. I know someone who moved from California to Tennessee and cut their housing costs in half. It’s not for everyone, but it’s a reminder that you have options. Sometimes, it’s about rethinking what “home” means to you.
What’s Next for Home Affordability?
The housing market is always shifting, and 2025 is no exception. Will mortgage rates drop? Will more homes hit the market? No one has a crystal ball, but staying informed is your best bet. Keep an eye on economic trends, like interest rate changes or new housing policies. And don’t be afraid to talk to a financial advisor—they can help you navigate the chaos.
In my experience, the journey to homeownership is as much about patience as it is about money. Whether you’re in a state where homes are a steal or one where they feel like a luxury, the key is to start planning now. Run the numbers, set a goal, and take it one step at a time. Your dream home might be closer than you think—or it might just be in a different state.
Buying a home is one of life’s biggest milestones, but it’s not one-size-fits-all. From Hawaii’s sky-high prices to Ohio’s budget-friendly options, the income you need depends on where you plant your roots. What’s your next step? Maybe it’s saving for that down payment, exploring a new state, or just dreaming a little bigger. Wherever you are, keep the faith—your home is out there, waiting.
