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By Joe Edwards
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A new report suggests a cluster of mostly Midwestern states still offers one of the clearest paths to homeownership for households earning the median income, as the site warns that high prices and elevated borrowing costs continue to test buyers’ budgets.
According to Realtor.com’s report, median-income buyers can comfortably afford a median-priced home in 11 states: Iowa, Illinois, Ohio, Kansas, Indiana, Michigan, Pennsylvania, West Virginia, Missouri, Maryland and Minnesota. Realtor.com said it assessed all 50 states and Washington, D.C.
"The highlighted states here combine low home prices with relatively high incomes to result in strong affordability," Realtor.com senior economist Joel Berner told Newsweek.
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Why It Matters
Housing affordability is a major factor in whether Americans can buy homes, build equity and stay near jobs, schools and family. When housing costs take up too much of a household’s income, buyers may have less room in their budgets for savings, childcare, transportation and emergencies.
Realtor.com’s report used the commonly cited benchmark that households should spend no more than 30 percent of gross monthly income on housing costs to avoid being considered cost-burdened.
What To Know
Iowa ranked as the most affordable state by Realtor.com’s affordability measure, with buyers needing to spend 25.4 percent of their earnings to afford the median home price of $282,886, the lowest share in the country.
Illinois placed second. Its median list price was higher, at $307,674, but buyers needed a slightly larger 26 percent share of median household income to afford a median-priced home.
Ohio and Kansas were tied on affordability, with median-priced homes requiring 27 percent of median household income in both states. Ohio’s median list price was $277,348, compared with $292,632 in Kansas.
Indiana completed the top five, with the cost of a median-priced home equal to 28.3 percent of median household income. The state’s median list price was $295,810, according to the report.
The full group of states where median-income households could afford a median-priced home also included Michigan, Pennsylvania, West Virginia, Missouri, Maryland and Minnesota.
Those 11 states all sat below the 30 percent affordability benchmark cited by Realtor.com.
Berner said that states hoping to emulate those highlighted in the report should focus policy initiatives on creating more jobs and building more homes.
"The incomes in these Midwestern states aren't particularly high on their own, but their unemployment rates are low, and the median incomes are strong relative to home prices. Building more homes can bring home prices down, so other states looking for inspiration should adopt policies that keep local and state government out of the way of developers and builders," he said.
"Things like more permissive zoning, streamlined permit processes, and relaxed environmental reviews could really move the needle on costly coastal states becoming more affordable to prospective homebuyers," said Berner.
Where the Most Housing Is Being Built
Newsweek reported last year that Texas and Florida had been leading the country in new-home building, based on Census Bureau building permit data. In 2024, Texas recorded 225,756 authorized housing units, while Florida recorded 173,326.
The South accounted for 805,034 of the nation’s 1,478,000 authorized housing units in 2024, followed by the West with 327,256.
“Most new housing will continue to come from parts of the Sun Belt and select Midwestern markets where building is still feasible,” Redfin chief economist Daryl Fairweather told Newsweek at the time.
Contact Newsweek editors on this story: Ben Kelly and Sam Wilson.
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