Study finds homeownership is only affordable in three U.S. states

Homeownership has become so unattainable over the past five years that just a fraction of the country’s population lives in areas where buying a property is affordable.

Only three states meet the affordability standard for homeownership, according to a recent study from moving services firm HireAHelper. The study defined “affordable” as a mortgage payment that makes up 30 percent or less of a state’s median income.

“Across the country, the gap between what people earn and what it takes to buy a home is widening fast, pushing homeownership further out of reach for millions of Americans,” the study said.

Louisiana leads the trio of states where buying a property is actually affordable. Homeowners there earn $6,000 more each year than the median yearly cost of their mortgage.

Following Louisiana were Iowa and Minnesota.

One Southern state is home to the most affordable homes in the nation, based on the traditional rule of limiting mortgage payments to 30 percent of a homeowner’s income (Getty)

Those three states have strings attached, though, HireAHelper noted.

“Affordability comes with tradeoffs,” the study said. “Many of these markets have fewer major job centers, slower population growth, and more modest wage gains, which can limit long-term economic opportunity.”

Homeowners in the country’s 47 other states are facing monthly homeownership costs that exceed the 30-percent rule.

The most unaffordable states for homeownership were California, which required a $103,216 income increase to meet the 30 percent home affordability rule followed by Rhode Island ($86,810 pay increase), New Jersey ($82,426), New York ($76,976) and New Hampshire ($74,814)

Nationally, the median home sale price rose past $400,000 for the first time ever in December 2024 and has stayed above that threshold through the first three months of 2026, according to data from the Federal Reserve.

Homebuyers in California would have to boost their yearly income by at least $100,000 to comfortably afford a home (AP)

The historic ascent of home prices has happened alongside a tough interest-rate landscape for homebuyers. Mortgage rates for 30-year, fixed-rate mortgages surged past 6 percent in September 2022 for the first time since October 2008, according to mortgage buyer Freddie Mac.

The average rate as of Thursday, 6.49 percent, is 145 percent higher than when rates hit a pandemic low of 2.65 percent in January 2021.

Median time on the market held steady year-on-year, ending a 26-month streak of homes taking longer to sell than the previous year, according to a market analysis from Realtor.com.

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