Buying a home might seem like a fairytale for tens of millions of people struggling with rising inflation and gas prices in recent months.
But one Midwest state offers hope, according to a Realtor.com report this week. The study identified Indiana as the most affordable state to buy a home in 2026, based on factors including the supply of new builds, median household income and median sale prices of properties.
“What the 2026 update shows is that the states making real headway are the ones doing both things well - keeping homes within reach of today's median earners and building enough new supply to meet demand. Indiana's rise to the top of the class is a textbook example of that balanced approach,” Realtor.com Chief Economist Daniel Hale said.
While Indiana ranked No. 1 for affordability, Iowa, South Carolina, Texas and North Carolina followed close behind.
The South was the most affordable region in the country overall followed by the Midwest, West and Northeast.
The five most expensive states to buy a home were New York, Massachusetts, Rhode Island, Hawaii and California, the study found.
Aspiring homeowners are facing major headwinds, the researchers noted. Mortgage rates passed 6 percent for the first time in nearly 15 years in 2022 and have stayed there for all but one week since, according to federal data. Rates hit 6.52 percent this past week, up 0.54 percentage points since February 26.
The average sale price of a U.S. home is hovering around 2025’s all-time high of $541,300, and inventory levels have yet to return to pre-pandemic levels, according to Federal Reserve data. Home sale prices dropped slightly between the end of 2025 and March 2026, but still remain above $500,000.
Experts recommend that housing costs - whether rent or a mortgage - be no higher than 30 percent of a consumer’s income - something that’s no longer feasible in some parts of the country.
Currently in New York state, the average mortgage payment would be nearly 80 percent of the state’s median income, based on the average 30-year fixed mortgage rate.
President Donald Trump has taken steps over the past year to make housing more affordable for average Americans, including a ban on Wall Street firms buying residential housing in January.
Trump floated the idea of lowering monthly payments by introducing a 50-year mortgage in November. At the beginning of the year, he also considered asking the government to buy $200 billion in mortgage bonds to lower interest rates. Neither idea has become reality - Trump’s five-decade mortgage faced backlash because the extended repayment period would rack up huge interest charges.
