The COVID-19 pandemic has ushered in an unprecedented surge in demand for homeownership in the United States. Inventory is at a record low, as is the average time it takes to sell a home. Meanwhile, both home prices and the share of homes selling above asking price are at record highs.
Of course, in some parts of the country, high home prices are nothing new. Even before the pandemic, the median home value in nearly a dozen states was over $300,000. In stark contrast, there are some states where the typical home is worth over $100,000 less than the national median home value of $240,500.
Using data from the U.S. Census Bureau, 24/7 Wall St. identified the most and least expensive states to buy a home.
Home values in a given area are often a reflection of what residents can afford. And, not surprisingly, in states with low median home values, incomes also tend to be relatively low and vise-versa. In each of the five states with the lowest median home values, the median household income is over $10,000 below the $65,700 that the typical American household earns. Similarly, the five states with the highest median home values have median household incomes that exceed the national median by over $10,000.
Even though home values tend to track closely with incomes, homes still appear to be more affordable in states with less expensive housing. The homeownership rate exceeds the national rate of 64.1% in each of the 10 states with the least expensive homes. Meanwhile, homeownership is more common than average in only three of the 10 states with the most expensive homes.