Missoula County, Montana Has Some of the Most Expensive Homes in America

Mortgage rates have risen recently, and so have home prices. This has begun to cause an affordability squeeze as people look for new places to live, often outside big cities that have been plagued by the COVID-19 pandemic. One way economists look at how much money people can afford to pay for a house is the percentage of a person’s income that goes towards monthly home payments.

Median home prices rose 18% across the country to $278,000 in the first quarter of 2021, compared to the same period a year ago. Home prices rose at least 10% in two-thirds of the country. Nationwide, monthly expenses homes purchased in the quarter accounted for 23.7% of wages.

In Missoula County, Montana, located in the Missoula metro area, homes are far less affordable than average. The typical home in the county sold for $407,813 in the first quarter of 2021, while the typical worker in the area earns $45,968 a year. Mortgage payments, taxes, and insurance on a typical area home total 48.2% of the typical annual income in the county — well above the 28% commonly accepted affordability threshold.

Assuming a 20% down payment, it would take a minimum annual income of $79,181 to afford a typical home in Missoula County, in keeping with the 28% rule. For context, across the U.S. as a whole, an annual income of about $52,523 is enough to afford a typical home, assuming the same 20% down payment and 28% affordability ratio.

To determine the counties with the most expensive homes in America, 24/7 Wall St. reviewed the first quarter 2021 U.S. Home Affordability Report recently issued by real estate research firm ATTOM Data Solutions. Income data, based on annualized weekly wages, came from the Bureau of Labor Statistics. These counties have the most expensive homes in America.