U.S. home sales skyrocketed during the COVID-19 pandemic – hitting a 15-year high of 6.1 million in 2021. The spike in demand, coupled with declining inventory, have put upward pressure on housing prices. Renters have not been spared, as housing has become one of the key drivers of surging U.S. inflation.
According to the Economic Policy Institute, a nonprofit think tank, a single adult can expect to pay an estimated $11,026 on housing in 2022. This amount varies across the country, however. In some states housing costs are far lower than the national average, while in others, Americans are paying thousands more.
Using data from the EPI’s Family Budget Calculator, 24/7 Wall St. identified the states with the highest housing costs. States are ranked on 2022 estimates of housing and utility costs for a modest studio apartment.
Depending on the state, housing costs for a single adult range from less than $7,000 a year to well over $16,000. Generally, states with higher than average housing costs are coastal, bordered at least partially by the Atlantic or Pacific Oceans, while states with lower than average housing costs are usually landlocked or located in the Deep South. This variation in cost is partially a reflection of what residents can afford, as states with higher rental costs also often have higher than average household incomes, and vice-versa. Here is a look at the income needed to be middle class in each state.
Home values also tend to be higher in areas with high housing costs, making homeownership prohibitively expensive for larger shares of the population. This may help explain why homeownership rates are often lower than the 64.4% national average in the states with the most expensive housing. Here is a look at the mortgage rate in America every year since 1972.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.