Housing Market Study: 10 Most Affordable States To Buy Homes This Summer
In spite of inflation gradually slowing, home prices across the U.S. remain high. However, there are still more than a handful of states where you can purchase a home for less than expected.
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In fact, there are 10 states where you can buy a home on an annual salary of less than $55,000.
Luxury bathroom manufacturer Badeloft recently completed an analysis of the most affordable states to buy a home. The research took into account the median home sale price in each state, the effective property tax rate, the average homeowner’s insurance premium, the average debt-to-income ratio in the state, and the cost-of-living index. Payments were calculated based on a 7% interest rate on a 30-year fixed mortgage.
If you are open to relocating, you may be able to achieve your dream of homeownership in one of these (primarily) southern or Midwest states. Here are the 10 states where purchasing a house is most affordable.
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Mississippi
The most affordable state in the U.S. to buy a home, Mississippi ranks number one due to a low effective tax rate of 0.67% and a median home price of $238,300. Even though homeowners insurance is on the high side at $3,762, the study shows that buyers with an income of just $39,880 can typically make it work thanks to an overall low cost of living in the state.
Louisiana
With a median selling price of $254,400, Louisiana is the second most affordable state to buy a home. The effective tax rate is just 0.56%, adding to the state’s affordability. Homeownership is possible with an annual income of just $47,061. However, due to recent hurricanes, expect to pay an average of $4,169 for home insurance.
Alabama
Alabama is a great place to vacation or settle down with gorgeous gulf shore beaches and a beautiful climate. You may be able to afford a home in Alabama on a salary of just $47,804. As with other states in the South, you’ll pay a hefty price ($3,778, on average) for home insurance, but the median sale price of a house is just $278,600. Combined with a low overall cost-of-living and an effective tax rate of just 0.40%, low home prices make Alabama an affordable state.
South Carolina
The median home price in South Carolina is $385,800, one of the higher prices in the ten most affordable states to buy a home. However, a low effective tax rate of 0.57% and relatively low home insurance prices of just $3,200 make the state affordable. You can buy a home with an annual salary of just $48,691.
Indiana
You don’t have to travel south to afford a home. Of the top 10 most affordable states for homeownership, four are in the Midwest, with Indiana being the most affordable in that region.
A low effective tax rate of 0.84%, moderate home insurance prices of $3,461, a cost-of-living index of just 95.1 and a low median selling price of $255,400 combine to make Indiana affordable. You can afford a house with an annual income of just $49,069.
Missouri
On the border between the Midwest and the South, Missouri is another affordable state in which to buy a house, with a median sale price of $261,000. Home insurance is $3,903, but the low cost of living index (just 93) covers insurance costs and the effective tax rate of 1.01%. You’ll need an annual income of at least $51,188 to afford a house in Missouri.
Delaware
Delaware straddles the line between the Northeast and the South, combining affordability with proximity to large cities like Washington D.C. It is also the only East Coast state where you can afford a home with an annual salary under $55,000, or $51,401, to be exact. The median sale price for a home in Delaware is $352,700, the second-highest on the list of most affordable states. But cheap homeowner’s insurance of just $1,760 per month, on average, helps make Delaware affordable.
Arkansas
You can afford a home in Arkansas with an annual salary of just $51,593, putting it eighth on the list of most affordable states. A threat of tornadoes drives home insurance prices up to an average of $4,701, but a low effective tax rate of just 0.64% and a cost-of-living index of just 96.7, along with a median sale price of $257,400 offsets the insurance costs to keep Arkansas affordable.
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Nevada
The only western state on the list of most affordable places to live, Nevada boasts a dry climate and a low cost of living index of just 92.3. This offsets a median home sale price of $451,300, the highest on the list of most affordable states. Home insurance is comparatively cheap, too, at an average of just $1,884 per month. You’ll need an annual salary of $53,767 to afford a home in this state.
Michigan
Finally, Michigan’s median home sale price and relatively low home insurance rates make this Midwest state affordable on a salary of just $54,992. The median price of a home is $255,500, while home insurance is just $2,782, on average. The state’s cost-of-living index is 98, meaning the state is less expensive than average overall.
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This article originally appeared on GOBankingRates.com: Housing Market Study: 10 Most Affordable States To Buy Homes This Summer