A surge in demand for homes in the United States, in addition to limited housing inventory, has created a sellers market unlike anything seen in recent memory. Homes are now selling faster than ever before — and also for more money than ever before.
As of August 2021, a typical single-family home in the United States costs $303,288 — up 17.7% over the last year. Of course, home values are not uniform across the country, and in some states, the typical home costs far more than the national average — while in others, homes cost far less.
According to estimates from Zillow, a Seattle-based real estate data company, the price of a typical single-family home can range from as little as $118,581 to as much as $764,146, depending on the state. While there are exceptions, the states with the most expensive homes are concentrated in the West, while the states with the lowest home values are mostly in the South.
Housing prices are determined by supply and demand forces as well as what local residents are willing to pay — and that is influenced largely by what they can afford. Not surprisingly, in states where the typical home is worth more than average, most households tend to earn more than the national median household income of $65,712. Similarly, states with lower home values typically have lower incomes.
States with higher home prices also tend to have a higher cost of living overall. For example, in the state with the highest median home value, all goods and services cost 18.1% more than they do on average nationwide, and in the state with the lowest median home value, the cost of living is 12.2% less than it is nationwide.