Cheapest State To Buy A Home

Buying a home is the most significant financial decision most people will make in their lifetime. In the United States, 91% of individuals want to buy a home in their lifetime. However, only 65.4% of U.S. households currently own their home.

cheapest state to buy a home

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One of the biggest concerns homebuyers face is the ability to afford a home. The Zillow Home Value Index, which measures only the middle price tiers of homes, sets the cost of a typical home in the United States at $344,141. Meanwhile, the median household income in the United States is $67,521 a year, meaning the median household can only afford a mortgage on a $250,000 home. Thus, many may find themselves priced out of homeownership.

Location is the greatest factor contributing to home prices, and costs vary widely from state to state. There are nine states with a typical home value below $200,000 and 8 with a typical home price above $500,000. Those states with the cheapest home prices tend to be concentrated in the Southern states. These states also tend to have lower costs of living overall. Those willing to relocate may find that the house marker offers them better prices elsewhere.

West Virginia is the cheapest state to buy a home. A typical home in West Virginia costs $129,103, nearly $30,000 less than Mississippi's and less than half of the national average. A homebuyer can expect to get 1,792 square feet of living space for that price. With the eighth-lowest property tax rate in the U.S. of 0.59%, homeowners can expect to pay about $762 in state property taxes per year. West Virginia also has the nation's highest homeownership rate, with 79.6% of its residents owning their homes.

Mississippi is the second-cheapest state to buy a home in, with a typical home valued at $157,828. This is less than half of the typical home price in the United States. The median home size in Mississippi is 1,879 square feet, larger than some of the median home sizes in more expensive states. Mississippi homeowners will pay property taxes at a rate of 0.81% per year, setting them back $1,278 annually. Homeownership in Mississippi is the second-highest in the nation, with 74.8% of residents owning their homes.

A typical home in Arkansas costs $169,867, the third-lowest in the country. Homebuyers can expect an average of 1,792 square feet of living space. With a homeownership rate of 66.5%, the state has a slightly homeownership rate than the country as a whole. Arkansas's state property tax rate is 0.63%, the tenth-lowest in the country, resulting in annual state property taxes of just $1,070 for a house priced at the typical home value.

The typical home price in Oklahoma is $171,057, just below half the national average of $344,141. The median home size in Oklahoma is 1,746 square feet, just slightly higher than Arkansas. Oklahoma homeowners pay a property tax rate of 0.90%, resulting in about $1,540 in taxes per year based on the typical home value. Oklahoma's homeownership rate is 67.3%.

The typical home value is $183,418 in Iowa, the fifth-lowest in the United States. The average home has 1,550 square feet of living space. With a relatively high property tax rate of 1.56%, homeowners can expect to pay $2,861 in property taxes each year. Still, homeownership rates are among the highest in the nation, with 75.6% of residents owning their homes.

Kentucky is the sixth-cheapest state to buy a home in, with a typical home valued at $188,439. The average home in Kentucky offers 1,750 square feet of living space. Kentucky's effective state property tax rate is 0.86%, which means that a homeowner would pay about $1,621 in state property taxes every year based on the typical home's value. Kentucky's homeownership rate is 68.5%.

Alabama is the seventh-cheapest state to buy a home in. Alabama's median home price is $194,695. The average home size in Alabama is in line with the national average at 1,800 square feet. Alabama has the second-lowest state property tax rate of 0.42%. This, combined with a low median home value, means that homeowners pay only about $818 in state property taxes per year. Homeownership in the state sits at 71.5%.

Kansas is the eighth-cheapest state to buy a home in, with a typical home costing $198,199. This home price gets a homeowner about 1,782 square feet of living space. Kansas's effective state property tax rate is 1.41%, resulting in annual taxes of about $2,795 in taxes per year for homeowners.

Ohio's typical home value is just shy of $200,000. For $199,959, homeowners can expect to get 1,620 square feet of living space. At a rate of 1.58%, Ohio's state property taxes are significantly higher than the other states on this list. The typical homeowner can expect to pay about $3,159 in state property taxes each year. Homeownership in Ohio is at 67%.

The typical home in Louisiana costs $205,972. For this price, a homeowner can expect an average of 1,786 square feet of living space. With a real estate property tax rate of 0.55%, the typical homeowner can expect to pay $1,133 annually. Homeownership in Louisiana is at 69.7%.

Arkansas is another of the cheapest states to buy a house in 2023. It takes just 12% of the median household income to buy a house in the state. Arkansas is famous for its hot springs, acres of lakes, and booming poultry industry. The state has over 3 million people, and besides affordable real estate, offers residents a friendly atmosphere and a warm climate.

Kansas is a landlocked state located in the heart of the Midwest. The number one state for wheat production, Kansas is known for its wide-open plains and prairies. All that open land makes housing quite affordable, and it features a median listing price of $215,770. With a population of just under 3 million, Kansas features several major cities, including Wichita, Topeka, and Kansas City (at least the portion within the state lines). Agriculture, meatpacking, and dairy are the primary industries in Kansas, and the state produces about 20% of all wheat grown in the US.

Known as the Buckeye State or the birthplace of aviation, Ohio is the gateway to the Midwest. It has five cities with over 150,000 and features ample job opportunities in financial services, manufacturing, and agriculture. Housing in Ohio is much cheaper than in nearby states like Pennsylvania and New York. However, Ohio also features higher property taxes than many states on this list. But it's still considerably cheaper than the national average, and housing per square foot is among the most affordable in the country.

Known for its blues and jazz industry and its world-famous barbecue. Missouri is one of the most affordable states to buy a house in the U.S. One of the upsides to buying a house in Missouri is the high appreciation rates and affordable property tax rates.

Surrounded by the Great Lakes, Michigan features the longest freshwater coastline in the US at 3,288 miles long. Split into two sections by Lake Michigan, the northern landmass known as the upper peninsula is almost entirely covered by forestland. Michigan features a diverse economy dominated by the automobile industry in the early 20th century. Today, it's one of the cheapest places in the country in terms of housing and features a median list price of $237,650 and a price per square foot of just $132.

It is no longer news that every state comes with its home affordability rate. However, before purchasing a home in any state, you should do adequate research on the average mortgage rates, the economy, and other societal factors. Speak to local real estate agents about the ease of buying a home in your desired state and the various hoops you may face. 041b061a72