Mapped: How Much You Need To Earn in Every State To Buy a Home

Even as the summer housing market is gradually turning more buyer-friendly, the typical American still does not earn enough to keep up with monthly mortgage payments without becoming house-poor.

However, the degree of unaffordability varies widely across states. Overall, it has moderately edged down compared with the end of last year. 

Nationally, the typical U.S. household earned roughly 46% less than what’s recommended to afford a $439,950 home, which is the median list price for July, according to the latest available monthly housing figures from Realtor.com®.

The generally accepted “30% rule” suggests that a household should not spend more than 30% of its gross monthly income on housing costs, which include mortgage payments, property taxes, and insurance.

An analysis of July data from all 50 states and the District of Columbia shows that the minimum recommended income to afford a median-priced home exceeds the state-level median income by anywhere from just under 0.6% to a staggering 138%. 

Notably, in December 2024, affordability gaps by state ranged from 7% to 151%.

“Some states have gotten slightly more affordable over the last year due to wage growth outpacing home price growth,” says Realtor.com senior economic research analyst Hannah Jones. “However, with mortgage rates and home prices roughly flat in many places compared to last July, affordability has not improved significantly.”

Hawkeye State is named the most affordable

This summer, Iowa earned the distinction of being the nation’s most affordable state. While the typical household income in the Hawkeye State was just a few thousand dollars below the national median, coming in at $75,999, home prices there were roughly $150,000 below the national median in July.

These figures factor in property taxes and insurance,= and assume a 20% down payment and the current mortgage rate of 6.72%.

The typical Iowa household earned annually just 0.57%—or about $430—less than the recommended amount to purchase a home with the median list price of $290,000.

The affordability gap is calculated by subtracting the actual annual income from the minimum recommended income to afford a median-priced home and dividing it by the actual income.

As a result, Iowa came the closest to the coveted affordability benchmark in July.

In other words, investing in a median-priced home in Iowa would require spending just a little over the target 30% on housing, still leaving plenty of cash in the bank to cover other necessities.

“Located in the highly affordable Midwest, Iowa boasts incomes that are roughly in line with home prices,” says Jones. “In fact, all five of the most affordable states are located in the Midwest, shedding some light on the recent popularity of the region.”

The other four budget-friendly states are Illinois, Kansas, Ohio, and Indiana, where the difference between the actual median income and the minimum income needed to buy a home ranged from 5.6% and 14.1%. 

Strikingly, the gap between the most affordable state, Iowa, and the second-most affordable, Illinois, was 5%, highlighting Iowa’s unique position.  

Big Sky Country continues to lead in the affordability gap

For the second time in eight months, Montana posted the nation’s biggest affordability gap. That means the difference between how much the typical Montana household earned annually and how much it ought to have earned to comfortably afford a median-priced home was the highest among all 50 states and Washington, DC.

A closer look at the July numbers shows that the median Montana household brought in $72,066 per year, which was nearly $100,000 lower than the minimum recommended income of $171,301 needed to purchase a $649,900 home, the median price for the month.

To put it differently, a would-be homebuyer in Montana would require a 138% raise to comfortably afford a home in the state at the current mortgage interest rate of 6.72%.

The main reason for this disparity, according to Jones, is that home prices in Montana surged well beyond wage growth over the past five years, rendering the state woefully unaffordable for local incomes.

“Montana’s housing market has grown expensive due to an influx of out-of-state buyers, especially during and after the [COVID-19] pandemic, seeking remote work-friendly, scenic, and less densely populated areas,” explains Jones.

Limited housing supply, restrictive zoning in some areas, and sluggish new construction have strained Montana’s inventory.

In cities such as Bozeman and Missoula, robust buyer demand has driven up both home prices and competition.

From Massachusetts to West Virginia

Based on median home prices in each state, aspiring homebuyers in Massachusetts needed to earn $210,074 per year to comfortably afford a $797,000 property—the highest minimum required income and median list price in the U.S. as of July. 

That was roughly $112,000, or 114%, higher than the actual median income in the Bay State, making Massachusetts the third-least-affordable state, trailing Montana and perennially high-priced New York, where the affordability gap slightly exceeded 114% last month.

On the other side of the spectrum, West Virginia once again posted the lowest median list price in the U.S. of just $270,000. For context, that’s nearly $170,000 lower than the national median for the month.

To become a homeowner in West Virginia without breaking the bank, a household needed to bring in roughly $71,000—about 18% higher than the state’s actual median income.

10 least affordable states for homebuyers

1. Montana

Median home list price in July: $649,900

Median income: $72,066

Minimum income needed to afford median-priced home: $171,301

Affordability gap: $99,235

2. New York

Median home list price in July: $671,500

Median income: $85,657

Minimum income to afford median-priced home: $176,994

Affordability gap: $94,337

3. Massachusetts

Median home list price in July: $797,000

Median income: $98,170

Minimum income to afford median-priced home: $210,074

Affordability gap: $111,904

4. Hawaii

Median home list price in July: $761,000

Median income: $94,556

Minimum income to afford median-priced home: $200,585

Affordability gap: $106,029

5. California

Median home list price in July: $750,000

Median income:$95,065

Minimum income to afford median-priced home: $197,685

Affordability gap: $102,620

6. Idaho

Median home list price in July: $599,450

Median income: $77,609

Minimum income to afford median-priced home: $158,003

Affordability gap: $80,394

7. Oregon

Median home list price in July: $577,000

Median income: $80,356

Minimum income to afford median-priced home: $152,086

Affordability gap: $71,730

8. Rhode Island

Median home list price in July: $599,450

Median income: $85,698

Minimum income to afford median-priced home: $158,003

Affordability gap: $72,305

9. Washington

Median home list price in July: $659,475

Median income: $96,120

Minimum income to afford median-priced home: $173,825

Affordability gap: $77,705

10. Nevada

Median home list price in July: $499,450

Median income: $74,821

Minimum income to afford median-priced home: $131,645

Affordability gap: $56,824

10 most affordable states for homebuyers

1. Iowa

Median home list price in July: $289,938

Median income: $75,991

Minimum income to afford median-priced home: $76,422

Affordability gap: $431

2. Illinois

Median home list price in July: $323,225

Median income: $80,648

Minimum income to afford median-priced home: $85,196

Affordability gap: $4,548

3. Kansas

Median home list price in July: $301,126

Median income: $74,030

Minimum income to afford median-priced home: $79,371

Affordability gap: $5,341

4. Ohio

Median home list price in July: $289,950

Median income: $70,196

Minimum income to afford median-priced home: $76,425

Affordability gap: $6,229

5. Indiana

Median home list price in July: $309,450

Median income: $71,469

Minimum income to afford median-priced home: $81,565

Affordability gap: $10,096

6. Pennsylvania

Median home list price in July: $324,995

Median income: $74,855

Minimum income needed to afford median-priced home: $85,662

Affordability gap: $10,807

7. Missouri

Median home list price in July: $311,000

Median income: $69,725

Minimum income to afford median-priced home: $81,973

Affordability gap: $12,248

8. West Virginia

Median home list price in July: $270,000

Median income: $60,185

Minimum income to afford median-priced home: $71,167

Affordability gap: $10,982

9. Minnesota

Median home list price in July: $399,000

Median income: $88,572

Minimum income to afford median-priced home: $105,169

Affordability gap: $16,597

10. Michigan

Median home list price in July: $316,950

Median income: $70,131

Minimum income to afford median-priced home: $83,542

Affordability gap: $13,411