"From High Prices to Bargain Deals: A State-by-State Look at Home Affordability in 2024"

Photo byJohn Bazemore

The U.S. housing market has reached new heights in home values, with the median sales price for existing homes hitting a record $419,300 as of May 2024, according to the National Association of Realtors. This marks the 11th consecutive month of year-over-year price increases, driven by a combination of high interest rates, limited inventory, and a persistent supply shortage.

As the Federal Reserve considers cutting interest rates to alleviate some pressure on the housing market, homebuyers are eagerly watching for any signs of relief. Currently, the average rate for a 30-year fixed mortgage stands at 6.95%, up from the historically low rates seen during the pandemic.

Amidst these economic pressures, homebuyers are faced with significant regional disparities in affordability. Here’s a look at the most and least affordable states to purchase a home, based on Zillow’s April 2024 data:

Most Expensive States:

1. Hawaii - With a staggering median home value of $996,982, Hawaii remains the most expensive state for homebuyers. The high cost of living and limited land contribute to these astronomical prices.
2. California - At $805,913, California's home prices are driven up by its high demand and robust housing market.
3. Washington, D.C. - The nation’s capital follows closely with a median home price of $734,216, reflecting its high cost of living and limited housing supply.
4. Massachusetts - Homebuyers in Massachusetts face median prices of $645,245, influenced by its strong economy and high demand.
5. Washington - With a median price of $611,215, Washington state continues to see high home values, particularly in urban areas like Seattle.

Most Affordable States:

1. West Virginia - The least expensive state for homebuyers, West Virginia’s median home price is a mere $163,143. This low cost reflects its lower demand and abundance of available properties.
2. Mississippi - With a median home value of $178,983, Mississippi offers some of the most affordable housing in the country.
3. Louisiana - Home prices in Louisiana average $203,195, providing relatively affordable options for buyers.
4. Arkansas - At $205,879, Arkansas remains a budget-friendly choice for prospective homeowners.
5. Kentucky - With a median price of $207,527, Kentucky offers a cost-effective housing market compared to national averages.

The contrast between the highest and lowest home values highlights the significant regional disparities in the U.S. housing market. While states like Hawaii and California grapple with exorbitant prices, states like West Virginia and Mississippi offer a more accessible entry point for homebuyers.

As interest rates and housing supply continue to fluctuate, potential buyers should stay informed about regional market conditions to navigate these challenges effectively.