With home prices declining for over six months, some U.S. housing market conditions have shifted to favor buyers. Still, other conditions stack up against homebuyers, particularly mortgage rates. As inflation began to surge, the Federal Reserve raised interest rates nine times in 12 months in an attempt to stem inflation. The cumulative 475 basis points Fed rate hike sent mortgage rates soaring, forcing many homebuyers to reevaluate their budgets and consider exactly how much house they can afford.
Since September 2022, the average interest rate on a 30 year fixed rate mortgage has been above 6%, the highest it has been in nearly a decade and a half. With historically high borrowing costs, many homebuyers are seeking more affordable markets. And in some parts of the country, a relatively modest housing budget goes a lot further than in others.
Using data from the Federal Reserve Bank of St. Louis, 24/7 Wall St. calculated the size of a house you can buy with $200,000 in every state. States were ranked by the approximate square footage of a $200,000 home, from the smallest to the largest. Calculations were made using median home list price per square foot as of March 2023. Data on median home value, median number of rooms per house, and median household income is from the U.S. Census Bureau’s 2021 American Community Survey.
Depending on the state, the approximate size of a typical $200,000 home ranges from 300 square feet (about the size of two parking spaces) to 1,600 square feet. The states where $200,000 can get more of a house are often places where home values are relatively low across the board. Meanwhile, states where virtually nothing sells for $200,000 are those with some of the most expensive real estate in the country.
For example, in West Virginia, the state where homebuyers can get the most square footage on a $200,000 budget, the typical home is worth $143,200. Hawaii, meanwhile, which ranks on the other end of the spectrum, has a median home value of $722,500. (Here is a look at the states where home values increased the most during COVID.)
With home prices rising in much of the country throughout much of the pandemic, the typical size of a $200,000 home has declined over the past year – by well over 10% in some cases. There are exceptions, however. In nine states, homebuyers can buy a larger house on a $200,000 budget today than they could a year ago. These include states like California and New York, where people are moving out far faster than they are moving in. (Here is a look at the 11 states people are leaving in droves.)
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