Which U.S. states are the most affordable and in demand when buying a home?
Despite 2021 being a significant year for house sales in the U.S., we’ve seen a dramatic decline over the last couple of years. However, the number of sales is expected to increase once again, with an estimated five million homes closing in 2024.1 But which states are the most affordable and in demand when buying a home?
By analyzing house price data and average salaries in the U.S., we reveal which states offer the most affordable homes in 2024. We also show how the market has changed over the last five years.
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The Most Affordable U.S. States to Purchase a House
1. Louisiana – 7.58/10 affordability score
Louisiana takes the crown as the most affordable state in which to purchase a house. It has an affordability score of 7.58/10. The southeastern state has a population of approximately 4.6 million people2, with New Orleans as its biggest city.
House prices in Louisiana currently average around $254,000. With the average salary of just over $54,000, it would take residents approximately three and a half years to save for a 15% down payment.
Only 13% of homes in Louisiana sell for over the list price. This represents the fourth-lowest figure of all states analyzed. 27.3% of homes in the state have their list price lowered before being sold.
2. Texas – 7.44/10 affordability score
In second place is Texas, earning an overall score of 7.44/10. The state is the second largest in the U.S. in terms of both area and population (30.5 million3).
32.1% of Texan homes see a reduction in their list price before prior to sale. This represents the fourth-highest figure among all states analyzed. In addition, just 16% of houses in the state sell above their stated list price.
Texans earn over $60,000 a year, on average. With the state’s median house price currently at $351,900, it would take someone around four years and four months to save enough money to cover a 15% down payment.
3. Oklahoma – 7.35/10 affordability score
Following closely behind is Oklahoma, with a total score of 7.35/10. The state has a population of just over four million4, with the most populous location being Oklahoma City.
Oklahoma house prices currently average around $240,300. The average salary in the state is just over $54,000, meaning that it would take around three years and three months to save for the standard 15% down payment.
23.7% of houses in Oklahoma are sold for over the list price, while 29.2% of homes see a reduction in price before being sold.
Louisiana has seen the smallest increase in house prices over the last five years
1. Louisiana – 23% increase
In 2019, the median house price in Louisiana was $206,500. Over the last five years, this figure has risen to $254,000, an increase of just 23%, the smallest of all the states analyzed.
The city of New Iberia has seen the biggest increase in house sale prices in Louisiana, currently standing at 29.1%. Metairie, however, has seen a 2.3% drop in the average list price.
Maine Has Seen the Biggest Increase in House Prices Over the Last Five Years
1. Maine – 78.5% increase
On the other hand, Maine has seen the biggest increase in house prices since 2019, standing at 78.5%. Five years ago, the median house price in the state was $219,000, but this figure has now risen to $391,000.
The city of Augusta has seen the biggest increase in house sale prices in Maine, currently standing at 22.1%.
Louisiana has seen the biggest increase in the number of houses for sale since 2019
1. Louisiana – 34.2% increase
Louisiana also tops the list for the number of houses for sale, increasing by 34.2% over the last five years. There are nearly 15,500 houses for sale in Louisiana, compared to almost just 11,550 in 2019.
Some of the most popular cities in Louisiana include New Orleans and Baton Rouge, with over 3,180 and 965 homes currently for sale, respectively.
Louisiana, Texas, New Mexico, and Florida were the only four states to see an increase in the number of houses for sale since 2019, with all other states experiencing a drop in properties on the market.
New Mexico has the Fewest Houses Selling Above List Price in 2024
1. New Mexico – 7.6% of houses sold above list price
Around 7.6% of homes in New Mexico currently sell above the list price. This shows a decrease of 13.6% since 2019. Then, approximately 8.8% of homes in the state sold above the asking price.
In New Mexico, townhouses (39.1%) are currently the most common type of home sold above the list price. Condos follow at 9.3%, with single-family homes coming in second at 6.7%.
The Number of Connecticut Homes Being Sold Above List Price has More than Doubled Since 2019
1. Connecticut – 175.7% increase
The number of homes being sold above list price in Connecticut has more than doubled in the last five years. 22.6% of homes in the state were sold for over their original price in 2019. However, this figure has now risen to 62.3%, showing a huge increase of 175.7%.
Currently, 62.9% of single-family homes and 62.3% of condos in Connecticut are sold over their list price.
More Mississippi Homes Seeing Price Reductions Than in 2019
1. Mississippi – 14,550% increase
Just 0.2% of houses in Mississippi saw a price drop before being sold in 2019. Over the last five years, this figure has increased by a huge 14,550%. Approximately 29.3% of Mississippi homes now receive a price drop before going off the market.
Currently, 29.5% of single-family homes in Mississippi are only sold following a reduction in list price. Despite these types of homes offering more privacy and space due to being either fully or semi-detached, they do often see price drops as they come with higher list prices and increased maintenance responsibilities.
Ohio Has the Lowest Average Save Time for a Down Payment
1. Ohio – 3.2 years average save time
Those wanting to purchase a house within the next few years should consider Ohio, as the state has the lowest average save time for a down payment. Ohio citizens earn less than $55,800 a year, on average. Following the 50-30-20 rule, those looking to buy a house in the state could save around $11,150 yearly towards a down payment.
The average 15% deposit for a house in Ohio is just over $35,800. This means that it would take an average of three years and two months to save enough money for a home down payment in the state.
California Has the Highest Average Save Time for a Down Payment
1. California – 9.4 years average save time
Those wanting to purchase a house in California should start saving now, as the state has the highest average save time for a down payment. On average, workers in California currently earn just less than $68,160 a year. Those looking to buy a house in the state could save around $13,632 per year towards a down payment if they follow the 50-30-20 rule.
In California, the average 15% deposit for a house is a huge $127,830. This means that it would take an average of nine years and almost five months to save enough money for a down payment for a house in the state. Of course, by that time, home prices would have increased even further, making it a very tenuous prospect to save for a home in this and similar states.
North Carolina Has Seen the Biggest Increase in Demand for House Purchases
1. North Carolina – 63.7% increase
There has been a significant rise in the number of people looking to buy a home in North Carolina recently. Between June 2022 and May 2023, around 602,600 searches were made on Google relating to house purchases in North Carolina. By the following year, this figure had risen to 986,400, showing a 63.7% increase in demand.
Some popular cities for house purchases in North Carolina include Charlotte, Raleigh, and Durham. However, the most in demand city is Cary, with listings lasting just over two weeks on the market, on average.
Methodology:
We used Redfin to find the following data points for each state for both April 2019 and April 2024: median house price, number of homes for sale, percentage of homes sold above list price, and percentage of homes with price drops. All data is correct as of 13 June 2024.
We then calculated the year-on-year changes for each state for each factor.
Google Keyword Planner helped us find the number of searches for the following terms: “houses for sale in STATE,” “STATE real estate,” and “houses in STATE.” Taking the number of searches made between June 2022 and May 2023 and June 2023 and May 2024, we calculated the year-on-year changes for each state.
Next, we used the 2024 median house price data to calculate a 15% down payment for each state, which is the nationwide average deposit according to ATTOM.
We then used the U.S. Bureau of Labor Statistics to discover the average weekly earnings per person for each state. To calculate each state’s average salary, we took the average weekly earnings and multiplied this figure by 52.
Based on the 50-30-20 rule outlined by the United Nations Federal Credit Union, people should save 20% of their salary for expenses such as housing down payments. We used this figure and the average salary and down payment for each state to calculate how long it would take people to save for a house deposit.
Finally, we used the 2024 median house price, average salary, average time to save for a down payment, percentage of houses sold above list price, and percentage of houses with price drops for each state and ranked them using a PERCENTRANK function to create an affordability score.
Please note that the following states don’t appear in some rankings due to a lack of data: Alaska, Massachusetts, Montana, North Dakota, South Dakota, and Wyoming.
Any additional supporting data surrounding the housing market was also taken from Redfin.
1 https://www.statista.com/statistics/226144/us-existing-home-sales/
2 https://www.citypopulation.de/en/usa/cities/louisiana/
