GOBankingRates

Best (and Worst) States to Buy a Home This Spring

For those looking to buy a home in 2016, the housing markets are looking up. Real estate company Redfin projects that home prices — which shot up in 2015 — will grow half as fast in 2016, and homes will stay on the market for longer, reports mortgage news site HousingWire.com. Overall, this could mean more choices for homebuyers, both for houses and lending, as well as more time to make a smart home purchase.

With housing markets, however, location is always key, and the costs of buying a home can vary widely from state to state. To find the states that are offering homebuyers the best deal in 2016, GOBankingRates surveyed and ranked all 50 states according to five key housing factors that make a home an affordable and smart investment:

  • Housing affordability, measured as the ratio of median housing prices compared to median household incomes
  • Price of renting compared to the price of purchasing the same home
  • Year-over-year home values, with rising values indicating a smarter investment
  • Average mortgage APR in the state
  • Property taxes for the state

Click through to see if your state falls among the best or worst to buy a home this spring.

Building Wealth

Worst States to Buy a Home This Spring

Buying a home this spring might be on your to-do list, but if you live in the following 10 states, you might want to wait on purchasing a house. Thanks to a combination of high property taxes, mortgage rates, home prices and price-to-rent ratios, buying and owning a home in these states will be difficult for the average homebuyer. Find out which states made the “Worst” list.

Related: Is My Credit Score Good Enough to Buy a House?

50. New Jersey

  • Property Taxes: 2.38%
  • Average Mortgage APR: 4.04%
  • Median Listing Price: $276,000

New Jersey is the worst state to buy a home this spring. The biggest factor hurting New Jersey homebuyers’ finances is the state’s property taxes, which are the highest of any state, according to figures from the Tax Foundation. The yearly property taxes for a home priced at the $276,000 median would be $6,569, or $547 a month. The state also has higher median listing prices, while home values were slow growing in 2015.

49. Virginia

  • Property Taxes: 0.78%
  • Average Mortgage APR: 4.31%
  • Median Listing Price: $265,000

Virginia residents face the fourth-highest mortgage rates in the country, according to mortgage rate averages from Rate-Watch. Compared to the median mortgage rate of 4.07%, Virginia’s rates add $5,000 to the total cost of a 30-year mortgage for each $100,000 borrowed. Compared to other states in this study, Virginia’s price-to-rent ratio is high, indicating renting might be a better option for many residents.

Building Wealth

48. New York

  • Property Taxes: 1.64%
  • Average Mortgage APR: 4.09%
  • Median Listing Price: $319,900

New York has higher property taxes and high home prices. Home values in the state actually fell overall in the past year, according to the Zillow Home Value Index, showing that a New York homebuyer might not see their investment pay off right away.

47. West Virginia

  • Property Taxes: 0.59%
  • Average Mortgage APR: 4.53%
  • Median Listing Price: $149,250

West Virginia home values barely increased in 2015, and it has the highest mortgage rates of any state. West Virginians will pay $9,723 more in interest per $100,000 borrowed through a 30-year mortgage, compared to someone paying the median 4.07% mortgage rate. So despite low prices and property taxes, West Virginia is one of the worst states to buy a home in the spring.

46. California

  • Property Taxes: 0.81%
  • Average Mortgage APR: 4.21%
  • Median Listing Price: $440,000

With higher mortgage rates and some of the highest home prices, buying a home in California will be tough for many residents. A Californian would need 7.3 times the state’s $60,487 median household income to buy a home at $440,000, the median Zillow listing price of homes in the state. The high home prices also mean that renting is often cheaper, as California’s price-to-rent ratio is one of the highest in the study.

Building Wealth

45. Montana

  • Property Taxes: 0.86%
  • Average Mortgage APR: 4.10%
  • Median Listing Price: $285,000

Montana’s higher home prices are out of reach for many of the state’s residents, since the median income is only $51,102. This also makes it often cheaper to rent than buy a home in this state.

44. Ohio

  • Property Taxes: 1.55%
  • Average Mortgage APR: 4.36%
  • Median Listing Price: $129,500

Ohio homebuyers have a few reasons to consider buying: houses are cheap compared to median household incomes and rents in this state. But this affordability is undercut by Ohio’s mortgage rates, which are the second-highest of any state, as well as high property taxes.

43. Connecticut

  • Property Taxes: 1.98%
  • Average Mortgage APR: 3.92%
  • Median Listing Price: $269,900

Property taxes will also be a burden on Connecticut homebuyers’ budgets, as the state has the fourth-highest rates in the nation. Taxes on a Connecticut home valued at the median listing price would add $445 a month in housing costs. Home values also fell slightly over the past year, so homebuyers might not start accruing home equity right away.

42. New Mexico

  • Property Taxes: 0.73%
  • Average Mortgage APR: 4.03%
  • Median Listing Price: $200,000

The biggest negative for New Mexico homebuyers is home values, which fell $1,200 on average in 2015 in this state, while home values across all states increased by a median of more than $5,000 in the same year. This is definitely as a sign of struggling local real estate markets.

Building Wealth

41. Pennsylvania

  • Property Taxes: 1.54%
  • Average Mortgage APR: 4.15%
  • Median Listing Price: $169,000

Rounding out the top 10 of the worst states to buy a home this spring is Pennsylvania. Lower prices and above-average incomes make Pennsylvania housing generally more affordable. But those in the market to buy a Pennsylvania home should watch out for steep property taxes and higher mortgages rates.

40. Arizona

  • Property Taxes: 0.80%
  • Average Mortgage APR: 4.17%
  • Median Listing Price: $249,000

With lower incomes, higher home prices and mortgage rates that are higher than in most states, homeownership is out of reach for many Arizona residents. Buying is especially expensive when compared to renting.

39. Illinois

  • Property Taxes: 2.32%
  • Average Mortgage APR: 4.06%
  • Median Listing Price: $179,900

Illinois’ property taxes are the second-highest in the nation. At 2.32 percent, they add $4,174 a year, or $348 a month, to the costs of owning a home valued at the median listing price. Home values are also slow-growing in Illinois.

38. North Dakota

  • Property Taxes: 1.11%
  • Average Mortgage APR: 4.05%
  • Median Listing Price: $239,900

North Dakota housing scores a bit below average across most factors considered in this study, though the biggest drawback is the high cost of buying compared to renting. With home prices high in this state, renting is often a cheaper choice.

Building Wealth

37. Michigan

  • Property Taxes: 1.78%
  • Average Mortgage APR: 4.22%
  • Median Listing Price: $132,000

Michigan residents need just about 2.5 years of the state’s $52,005 median household income to afford a home at the median listing price (a 20 percent down payment is just half a year’s income). But high property taxes add a $196 monthly expense to owning the same home, and above-average mortgages will increase costs as well.

36. Louisiana

  • Property Taxes: 0.51%
  • Average Mortgage APR: 4.33%
  • Median Listing Price: $183,400

Mortgage rates are higher in Louisiana, and local homebuyers might not be able to afford additional costs with the median household income at just $42,406 annually, one of the lowest in the nation. This means buying a home is out of financial reach for many in Louisiana, even though the median listing price here is lower than those in most states.

35. Alabama

  • Property Taxes: 0.43%
  • Average Mortgage APR: 4.23%
  • Median Listing Price: $169,900

Alabama has the second-lowest property taxes in the nation, adding just $61 a month to the cost of owning a home priced at the state’s median. These savings are great news, but Alabama residents’ low incomes (the median is just $42,278) might still hold them back from the dream of buying a home this spring.

Building Wealth

34. Maryland

  • Property Taxes: 1.10%
  • Average Mortgage APR: 3.98%
  • Median Listing Price: $254,900

Maryland home values are some of the slowest-growing in the nation, which means homebuyers are unlikely to see immediate equity returns from their purchase. Home prices are also on the higher end (though so is the median household income, at $76,165); for many Maryland residents, renting will be the cheaper choice.

33. Delaware

  • Property Taxes: 0.55%
  • Average Mortgage APR: 4.06%
  • Median Listing Price: $264,990

Homes in Delaware are expensive enough to price many locals out of the market, even with the state’s above average $57,522 median household income. Getting together a 20 percent down payment alone requires saving more than 90 percent of a year’s pay for a typical homebuyer.

32. Texas

  • Property Taxes: 1.90%
  • Average Mortgage APR: 4.18%
  • Median Listing Price: $250,000

Texas home values are on the rise, which is great news for homebuyers in the Lone Star State. High property taxes are the downside of owning a Texas home, however, as well as expensive home prices. Together, these add $396 a month to typical Texas housing costs.

31. Alaska

  • Property Taxes: 1.18%
  • Average Mortgage APR: 4.09%
  • Median Listing Price: $264,900

Alaska residents are likely to save more money by renting than buying. Many homes are expensive compared to rent prices in Alaska, and homeowners will face additional costs that renters won’t, like higher property taxes and middling mortgage rates.

30. Hawaii

  • Property Taxes: 0.28%
  • Average Mortgage APR: 3.93%
  • Median Listing Price: $549,000

Hawaii has the lowest property taxes of any state and lower mortgage rates than most. This will be welcome relief to Hawaii homebuyers, who face the highest home prices of any state. The prices are so high they are out of reach for most of the state’s residents, despite the state’s higher median income of $71,223.

The high cost also makes buying more cost-prohibitive than renting — among all of the states listed in this study, Hawaii has the highest price-to-rent ratio.

29. Utah

  • Property Taxes: 0.68%
  • Average Mortgage APR: 4.10%
  • Median Listing Price: $289,900

First-time homebuyers in Utah will need to save for longer to afford a home, as a typical home price is 4.6 times the median household income of $63,383. There are a couple of bright spots in this market, however, including low property taxes and home values that are on the rise.

28. Idaho

  • Property Taxes: 0.75%
  • Average Mortgage APR: 4.06%
  • Median Listing Price: $223,490

Idaho has a similar situation to Utah. Residents earning the median household income of $53,438 in the state would need 4.2 years’ worth of earnings to match the state’s median home price. Even with low property taxes, renting will often be cheaper than buying a home in Idaho.

27. Wisconsin

  • Property Taxes: 1.96%
  • Average Mortgage APR: 3.99%
  • Median Listing Price: $164,900

Wisconsin homebuyers will benefit from lower prices, lower mortgage rates and higher-than-average incomes. Together, these factors make it easier to keep mortgage payments on a Wisconsin home affordable and budget-friendly. Just make sure to account for the state’s high property taxes.

26. South Carolina

  • Property Taxes: 0.57%
  • Average Mortgage APR: 4.15%
  • Median Listing Price: $207,416

Houses are less expensive in South Carolina than in many states, but so are incomes. The median income is just $44,929 in this state. Still, buying here is cheaper compared to renting than in many states, and low property taxes will also help keep housing costs down.

25. Nevada

  • Property Taxes: 0.86%
  • Average Mortgage APR: 4.15%
  • Median Listing Price: $235,000

Nevada is middle-of-the-pack thanks to average housing prices matched by below-average incomes. Compared to renting, Nevada homebuyers might find their new purchase to be a bit expensive. But, at least they’ll be accruing home value at a decent rate; Nevada home values rose 10 percent in the past year, and Zillow projects they will rise another 4.7 percent in 2016.

24. Wyoming

  • Property Taxes: 0.61%
  • Average Mortgage APR: 4.09%
  • Median Listing Price: $232,900

Paying one of the lowest property taxes in the nation will be a big boon for Wyoming homebuyers, especially with the state’s higher housing prices. For other factors considered in this study, including affordability and mortgage rates, Wyoming is about average.

23. Mississippi

  • Property Taxes: 0.80%
  • Average Mortgage APR: 4.08%
  • Median Listing Price: $155,000

Earning the lowest incomes in the nation (median of $35,521 annually per household) will be a major barrier keeping Mississippi homebuyers out of the housing market. However, those who can afford to buy will definitely benefit from doing so; the price-to-rent ratio in Mississippi is smaller than other states’ ratios. Plus, property taxes are pretty low.

22. North Carolina

  • Property Taxes: 0.85%
  • Average Mortgage APR: 4.01%
  • Median Listing Price: $209,900

Lower property taxes and mortgage rates will go far in helping North Carolina homebuyers keep costs low, especially considering that housing prices are high compared to the local median household income of $46,784.

21. Massachusetts

  • Property Taxes: 1.21%
  • Average Mortgage APR: 3.95%
  • Median Listing Price: $349,900

Massachusetts has one of the highest housing prices of any state in this study, which will be the biggest obstacle for new homeowners to overcome — especially since high prices often make it cheaper to rent. Higher property taxes will also add to homeowners’ financial burdens to the tune of $4,234 a year for a home valued at the median listing price. The good news, however, is the state’s below-average mortgage rates and growing home values.

20. Rhode Island

  • Property Taxes: 1.67%
  • Average Mortgage APR: 3.85%
  • Median Listing Price: $267,500

Rhode Island’s below-average mortgage rates will help the state’s homebuyers keep housing costs in check, despite high property taxes levied by the state. Rhode Island housing markets have steadily increased in value, 4.4 percent in the past year, and Zillow projects they’ll continue to grow by 3.2 percent within the year. This could make a home a smart investment for Rhode Islanders, despite high prices that can often make buying expensive and renting the cheaper short-term option.

19. Vermont

  • Property Taxes: 1.71%
  • Average Mortgage APR: 3.73%
  • Median Listing Price: $235,000

Vermont has the lowest mortgage rates of any state, 0.34 percent less than the median. With the state’s higher housing prices, this offers significant savings: $46 on monthly mortgage payments for a 30-year loan equal to the median listing price, and $16,477 over the life of the loan. These savings will be needed to offset Vermont’s high property taxes.

18. Oklahoma

  • Property Taxes: 0.86%
  • Average Mortgage APR: 4.15%
  • Median Listing Price: $159,900

Oklahoma has low property taxes, which are matched by low housing prices that together would add just $1,375 a year to the cost of owning a home. Low housing prices also make home buying an affordable option when compared to renting, even despite Oklahoma households’ low incomes with a median of $47,199.

17. Washington

  • Property Taxes: 1.09%
  • Average Mortgage APR: 4.08%
  • Median Listing Price: $284,950

Washington housing prices are on the higher end, but locals’ earnings don’t scale up to match, meaning that homebuyers in this state will need to do more saving and scrimping to achieve the goal of purchasing. Reasonable property taxes and mortgage rates help keep housing costs under control, however, and rising home values give new homeowners a better chance at building equity in their homes.

16. Oregon

  • Property Taxes: 1.09%
  • Average Mortgage APR: 4.09%
  • Median Listing Price: $285,000

As with its neighbor Washington, Oregon has high home prices, and local incomes are not proportionally high (median household income is $58,875) to match housing prices. This also means that in many cases, it’s cheaper to rent. Rising home values, however, do indicate that the Oregon housing market is hot, and homebuyers could build significant equity if they buy soon.

15. Georgia

  • Property Taxes: 0.95%
  • Average Mortgage APR: 4.07%
  • Median Listing Price: $187,900

Georgia has a housing market that’s friendly to homebuyers, thanks to lower home prices and property taxes. It’s also relatively affordable to buy instead of rent in Georgia.

14. Nebraska

  • Property Taxes: 1.84%
  • Average Mortgage APR: 4.07%
  • Median Listing Price: $163,000

Nebraska offers a double-whammy of home affordability: lower home prices and higher incomes. In fact, the state median income of $56,870 a year is equal to just 2.9 times the median listing price of Nebraska homes. Even better is that when compared to renting, buying is still financially beneficial, even though Nebraska property taxes are among the worst in the nation.

13. Minnesota

  • Property Taxes: 1.19%
  • Average Mortgage APR: 4.00%
  • Median Listing Price: $210,000

Minnesotans are some of the highest earners in the U.S. with a $67,244 median household income. High earnings mean Minnesota residents can more easily afford a home, especially with the help of below-average mortgage rates.

12. New Hampshire

  • Property Taxes: 2.15%
  • Average Mortgage APR: 3.78%
  • Median Listing Price: $245,000

New Hampshire offers the second-lowest mortgage rates in this study, which provides significant savings for the state’s residents. On a 30-year mortgage equal to the state’s median listing price, snagging New Hampshire’s low mortgage rate instead of the 4.07 median rate would save nearly $41 a month on mortgage payments, and lower interest payments by $14,676 over the life of the loan.

11. Kentucky

  • Property Taxes: 0.85%
  • Average Mortgage APR: 4.00%
  • Median Listing Price: $153,900

Kentucky manages to be cheaper than most states in nearly all factors, with below-average property taxes and mortgage rates, and affordable housing prices. Kentucky’s home values are slow-growing, a sign that local housing markets aren’t exactly taking off, but they are relatively steady. For Kentucky homebuyers ready to make this major purchase, now could be the time.

Best States to Buy a Home This Spring

Finally, here’s a look at the 10 best states for prospective spring homebuyers. Residents who are ready to make the leap from “renter” to “homeowner” will benefit from lower property taxes, mortgage rates, home prices and more. Click through to find out where buying and owning a home will be more affordable this spring.

10. Indiana

  • Property Taxes: 0.86%
  • Average Mortgage APR: 4.14%
  • Median Listing Price: $129,900

Rounding out the top 10 of the best states to buy a home this spring is Indiana. With the state’s median listing price at just $129,900, Indiana offers affordable housing even though locals earn a lower $48,060 median household income. This makes buying a great option over renting in this state, especially with its lower property taxes.

9. Florida

  • Property Taxes: 1.06%
  • Average Mortgage APR: 4.04%
  • Median Listing Price: $249,900

While it has higher housing prices, Florida residents will still find it relatively affordable to buy a home in this state. This is true even though home values in the state rose in the past year, which is also a good sign for Florida residents looking to build equity by investing in their home.

8. South Dakota

  • Property Taxes: 1.32%
  • Average Mortgage APR: 4.12%
  • Median Listing Price: $192,900

Homebuyers shopping in South Dakota will benefit from housing prices that are one the rise but still affordable. South Dakota home values rose 13 percent over the past year, according to Zillow, giving homeowners an equity boost of around $19,000 on average.

7. Iowa

  • Property Taxes: 1.49%
  • Average Mortgage APR: 3.93%
  • Median Listing Price: $145,900

Iowa property taxes are higher than in most states, adding $181 to monthly costs for homes at the median listing price. But homebuyers will still find Iowa housing affordable despite higher taxes, thanks to cheaper housing prices, lower mortgage rates and the relative expense of renting.

6. Kansas

  • Property Taxes: 1.39%
  • Average Mortgage APR: 3.96%
  • Median Listing Price: $148,000

Comparing Kansas housing prices to the median household income in the state, homebuyers come out ahead. With low Kansas housing prices and the decent $53,444 median income, just 2.77 years’ worth of income would buy a home outright, which makes Kansas one of the most affordable states to buy a home this spring.

5. Tennessee

  • Property Taxes: 0.75%
  • Average Mortgage APR: 3.97%
  • Median Listing Price: $169,900

Cheaper housing in Tennessee makes the dream of homeownership more accessible, especially when the costs of owning are compared to renting. Low property taxes and mortgage rates will also mean fewer housing costs for Tennessee homebuyers.

4. Missouri

  • Property Taxes: 1.02%
  • Average Mortgage APR: 3.96%
  • Median Listing Price: $139,900

Missouri homebuyers can easily save for and afford a home, thanks to a combination of cheap homes and above-average incomes in the state; the median household income of $56,630 is just 2.5 times the median listing price. Lower mortgage rates will also help local homebuyers pay less.

3. Arkansas

  • Property Taxes: 0.62%
  • Average Mortgage APR: 3.97%
  • Median Listing Price: $149,900

Even though Arkansas has one of the lower median household incomes at $44,922, low housing prices keep the American dream of homeownership within locals’ reach. Arkansans buying a home this spring will also benefit from lower mortgage rates. And with the state’s low property taxes and inexpensive houses, property taxes will add just $77 a month to housing costs for a typical homeowner.

2. Colorado

  • Property Taxes: 0.61%
  • Average Mortgage APR: 4.09%
  • Median Listing Price: $350,000

With high home prices, Colorado homebuyers will need to carefully weigh the costs of this major purchase to make sure they can afford it. In many cases, renting might still be cheaper than buying. However, Colorado home values saw the biggest increase of any state over 2015, up $29,600 on average, showing a big potential to quickly earn equity. Low property taxes will also help keep housing expenses manageable.

1. Maine

  • Property Taxes: 1.28%
  • Average Mortgage APR: 3.95%
  • Median Listing Price: $199,900

With a big jump in Maine home values (up $23,100 in 2015, on average), now is a good time for buyers to invest in some real estate — both to capitalize on equity growth and avoid getting priced out of the market. This is especially true since still-low home prices and below-average mortgage rates will help make home buying affordable and, for many, cheaper than renting.

Complete Ranking of the Best and Worst States to Buy a House This Spring

Rank State Rank State
1 Maine 26 South Carolina
2 Colorado 27 Wisconsin
3 Arkansas 28 Idaho
4 Missouri 29 Utah
5 Tennessee 30 Hawaii
6 Kansas 31 Alaska
7 Iowa 32 Texas
8 South Dakota 33 Delaware
9 Florida 34 Maryland
10 Indiana 35 Alabama
11 Kentucky 36 Louisiana
12 New Hampshire 37 Michigan
13 Minnesota 38 North Dakota
14 Nebraska 39 Illinois
15 Georgia 40 Arizona
16 Oregon 41 Pennsylvania
17 Washington 42 New Mexico
18 Oklahoma 43 Connecticut
19 Vermont 44 Ohio
20 Rhode Island 45 Montana
21 Massachusetts 46 California
22 North Carolina 47 West Virginia
23 Mississippi 48 New York
24 Wyoming 49 Virginia
25 Nevada 50 New Jersey

Keep Reading: 9 Tax Breaks Every First-Time Homebuyer Must Know

Methodology: GOBankingRates surveyed all 50 states on five housing factors to generate these rankings: 1) the price-to-rent ratio, calculated by each individual home that compares a year’s worth of rent to the home’s price, sources from Zillow; 2) median listing price-to-income ratio, which compares the state’s median listing price sourced from Zillow for Dec. 2015 to the Census Median Household Income data for 2014; 3) average mortgage APR for a 30-year fixed-rate mortgage of $175,000 sources from Rate-Watch as of Feb. 4, 2016; 4) property taxes as an annual percentage of the home’s value, sourced from the Tax Foundation; 5) increase of home values from Jan. 2015 to Dec. 2015 according to the Zillow Home Value Index. GOBankingRates then scored each state on each factor, giving double the weight to mortgage APRs, the price-to-rent ratio and increases in home values. Scores were totaled and used to rank the states from best at No. 1 to worst at No. 50.