The Most affordable Housing Market in Each State

The common lending guideline, or the 28% mortgage rule, stipulates that homeowners should spend 28% or less of their monthly gross income on major housing expenses — including mortgage principal, interest, taxes, and insurance. Nationwide, however, such expenses on median-priced homes accounted for 32.3% of the average national wage in the first quarter, according to real estate data company ATTOM.

That is not to say that some housing markets are considerably more affordable than the national average and are well within the rule. In fact, nationwide, these are the most affordable housing markets. In each state, too, there are more and less affordable housing markets.

To find the most affordable housing markets in each state, 24/7 Wall St. reviewed data from real estate data company ATTOM’s 2024 U.S. Home Affordability Report. ATTOM analyzed median home prices and average wage data from the Bureau of Labor Statistics in 590 U.S. counties to find the percentage of average wages needed to pay for major expenses on a median-priced home with a 30-year fixed-rate mortgage and a 20% downpayment. 24/7 Wall St. listed here the county in each state where the lowest percentage of wages is required to afford a median-priced home. States are ordered alphabetically.

Just because a housing market is the most affordable in its state does not mean it is actually affordable. In 21 states, the most affordable housing market does not adhere to the 28% mortgage rule, including 16 states where the most affordable housing market is less affordable than the national average. In eight of those, homeowners would have to spend over 40% of their income on major housing expenses.

For example, in Hawaii, the most affordable housing market is Hawaii County, which encompasses the Big Island. The median sales price of housing in the county was $515,000 in the first quarter (only for single-family homes and condos). The median local annualized wage, meanwhile, is just $54,561, meaning homeowners housing expenses amount to nearly 61% of their annualized wage. To adhere to the 28% rule, the required annual wage would be about $118,000. (Also see: This City Has the Most Expensive Houses in America.)

Of course, there are states where the most affordable housing market is considerably more affordable than is required. Of the 29 states where the most affordable housing market adheres to the 28% mortgage rule, in 19, homeowners would need to spend less than 20% of their wages on housing expenses. For example, in Macon County, Illinois, housing expenses amount to just 11.9% of wages.

Why This Matters

Home affordability has been a sore subject for some time, as housing prices growth has far outpaced wage growth in recent years. With interest rates near highs not seen in decades, affordability has further worsened. The good news is that in the past two quarters, home affordability has improved, according to real estate data company ATTOM. The bad news is that affordability remains near the worst levels in 15 years as home prices stay close to all-time highs. Here we aim to find the most affordable housing market in each state.