Here’s How Much You Need To Make To Afford a Home in the Midwest

With the troubling state of the housing market, finding an affordable new home isn’t simple. Certain states fare better than others in terms of average sales prices — not to mention the overall cost of living. While New York or California may be beyond reach, you might have better luck in the Midwest.

If you’re in the market for a new house, you’re left with the difficult task of weighing the costs against your income. You don’t want to wind up house-poor or in a position to declare bankruptcy — so you might find it helpful to consult a financial advisor to work out a personalized budget, factoring in the down payment, mortgage payment, insurance, taxes and other considerations.

Here is how much you’ll need to make to afford a home in the Midwest, as well as some cities to consider that are cheaper than others.

• 2023 average home value: $239,065
• Monthly mortgage payment: $1,589
• Annual mortgage payments: $19,062
• Consider these cities: Decatur, Danville, Galesburg, Alton and Granite City

• 2023 average home value: $221,357
• Monthly mortgage payment: $1,248
• Annual mortgage payments: $14,971
• Consider these cities: Gary, Muncie, Anderson, Marion, Peru and East Chicago

• 2023 average home value: $201,546
• Monthly mortgage payment: $1,247
• Annual mortgage payments: $14,961
• Consider these cities: Ottumwa, Burlington, Clinton, Fort Dodge, Waterloo and Marshalltown

• 2023 average home value: $208,883
• Monthly mortgage payment: $1,261
• Annual mortgage payments: $15,130
• Consider these cities: Coffeyville, Parsons, Arkansas City, Chanute and Independence

• 2023 average home value: $212,868
• Monthly mortgage payment: $1,296
• Annual mortgage payments: $15,547
• Consider these cities: Flint, Detroit, Inkster, Bay City, Saginaw, Burton, Pontiac and Lansing

• 2023 average home value: $320,005
• Monthly mortgage payment: $1,873
• Annual mortgage payments: $22,475
• Consider these cities: Austin, Winona, Willmar, Saint Cloud, Duluth, Owatonna and Moorhead

• 2023 average home value: $226,968
• Monthly mortgage payment: $1,308
• Annual mortgage payments: $15,691
• Consider these cities: Jennings, Kennett, Kirksville, Sikeston and St. Joseph

• 2023 average home value: $242,560
• Monthly mortgage payment: $1,523
• Annual mortgage payments: $18,273
• Consider these cities: Alliance, Beatrice, Holdrege and Scottsbluff

• 2023 average home value: $245,226
• Monthly mortgage payment: $1,405
• Annual mortgage payments: $16,855
• Consider these cities: Devils Lake, Jamestown, Valley City and Minot

• 2023 average home value: $206,508
• Monthly mortgage payment: $1,291
• Annual mortgage payments: $15,495
• Consider these cities: Youngstown, Niles, Toledo and Steubenville

• 2023 average home value: $283,596
• Monthly mortgage payment: $1,679
• Annual mortgage payments: $20,145
• Consider these cities: Sioux Falls, Pierre, Rapid City and Yankton

• 2023 average home value: $262,566
• Monthly mortgage payment: $1,653
• Annual mortgage payments: $19,833
• Consider these cities: Antigo, Beloit, Marinette, Racine and Prairie Du Chien

Methodology: For this piece, GOBankingRates first surveyed monthly living expenses in all 50 states. The cost-of-living comparison included the following factors: (1) yearly mortgage by assuming 20% down payment, 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.27%) for every state and multiplying that by 12 (1 year), sourced from Zillow’s home value index and determined using CNET’s Mortgage Calculator formula; (2) annual necessities cost (grocery, utilities, healthcare and transportation) by taking the 2021 Bureau of Labor Statistics consumer expenditure survey and factored out by the Missouri Economic Research and Information Center’s cost of living index for all of 2022. Necessity costs were totaled using the annual dollar cost of necessities in each state. This dollar amount for necessities was then doubled to find the (3) actual annual income needed to live comfortably in the state, assuming a person is following the 50-30-20 budgeting guideline, which requires an income double the cost of necessities. The amount of money specified for savings is equal to 20% of the total income needed, and the amount specified for discretionary spending is equal to 30% of the total income needed. All data was collected on and is up to date as of May 10, 2024.