As mortgage rates continue to climb, many millennials may find themselves frustrated that the current real estate climate will make it too difficult for them to become homeowners. The silver lining, however, is that while there are some states where it is expensive and time-consuming to save money and buy a home, this is not true of every state.
To find out which states offer millennials the best, and worst, in home affordability, GOBankingRates evaluated the median home value for each state in conjunction with each state’s median income for people ages 25 to 34. Assuming millennials put away 20% of their salary each month to save for a down payment, we calculated how long it would take to afford a 20% down payment on a house with the median home value for each state. The estimated monthly mortgage payment was also factored in, using the current national average for a 30-year, fixed rate mortgage.
Read on to discover which 10 states are the best, as well as 10 states among the worst, for millennials who want to buy a home.
Best States for Millennials To Buy a Home
The 10 states which rank as the best for millennials to buy a home all have monthly mortgage payments for under $1,300. Two states, including Mississippi and West Virginia, stand out for their mortgage payments costing homeowners less than $1,000 each month.
In ascending order from lowest to highest monthly mortgage payment, here are the top 10 states where millennials do not need to go into tremendous debt to become homeowners.
West Virginia
- Median income: $65,724
- Monthly income: $5,477
- 20% towards saving for down payment: $1,095
- Median home value: $155,080
- Mortgage down payment (20%): $31,016
- Loan amount: $124,064
- Months to save for down payment: 28.31
- Years to save: 2.4
- Monthly mortgage payment: $815
Mississippi
- Median income: $58,241
- Monthly income: $4,853
- 20% towards saving for down payment: $971
- Median home value: $170,653
- Mortgage down payment (20%): $34,131
- Loan amount: $136,523
- Months to save for down payment: 35.16
- Years to save: 2.9
- Monthly mortgage payment: $897
Iowa
- Median income: $80,820
- Monthly income: $6,735
- 20% towards saving for down payment: $1,347
- Median home value: $212,367
- Mortgage down payment (20%): $42,473
- Loan amount: $169,894
- Months to save for down payment: 31.53
- Years to save: 2.6
- Monthly mortgage payment: $1,117
Kentucky
- Median income: $69,951
- Monthly income: $5,829
- 20% towards saving for down payment: $1,166
- Median home value: $196,412
- Mortgage down payment (20%): $39,282
- Loan amount: $157,130
- Months to save for down payment: 33.69
- Years to save: 2.8
- Monthly mortgage payment: $1,033
Louisiana
- Median income: $67,420
- Monthly income: $5,618
- 20% towards saving for down payment: $1,124
- Median home value: $195,240
- Mortgage down payment (20%): $39,048
- Loan amount: $156,192
- Months to save for down payment: 34.75
- Years to save: 2.9
- Monthly mortgage payment: $1,027
Oklahoma
- Median income: $68,367
- Monthly income: $5,697
- 20% towards saving for down payment: $1,139
- Median home value: $200,153
- Mortgage down payment (20%): $40,031
- Loan amount: $160,122
- Months to save for down payment: 35.13
- Years to save: 2.9
- Monthly mortgage payment: $1,052
Kansas
- Median income: $78,703
- Monthly income: $6,559
- 20% towards saving for down payment: $1,312
- Median home value: $217,817
- Mortgage down payment (20%): $43,563
- Loan amount: $174,253
- Months to save for down payment: 33.21
- Years to save: 2.8
- Monthly mortgage payment: $1,145
Ohio
- Median income: $75,413
- Monthly income: $6,284
- 20% towards saving for down payment: $1,257
- Median home value: $218,535
- Mortgage down payment (20%): $43,707
- Loan amount: $174,828
- Months to save for down payment: 34.77
- Years to save: 2.9
- Monthly mortgage payment: $1,149
Arkansas
- Median income: $63,883
- Monthly income: $5,324
- 20% towards saving for down payment: $1,065
- Median home value: $198,364
- Mortgage down payment (20%): $39,673
- Loan amount: $158,691
- Months to save for down payment: 37.26
- Years to save: 3.1
- Monthly mortgage payment: $1,043
Michigan
- Median income: $76,819
- Monthly income: $6,402
- 20% towards saving for down payment: $1,280
- Median home value: $230,125
- Mortgage down payment (20%): $46,025
- Loan amount: $184,100
- Months to save for down payment: 35.95
- Years to save: 3.0
- Monthly mortgage payment: $1,210
Worst States for Millennials To Buy a Home
The following 10 states ranked in the bottom half of the worst states for millennials to buy homes due to having increasingly expensive monthly mortgage payments. Hawaii ranks in 51st place with the highest monthly mortgage payment out of any state at $5,086 each month.
Nevada
- Median income: $75,908
- Monthly income: $6,326
- 20% towards saving for down payment: $1,265
- Median home value: $441,049
- Mortgage down payment (20%): $88,210
- Loan amount: $352,839
- Months to save for down payment: 69.72
- Years to save: 5.8
- Monthly mortgage payment: $2,319
Montana
- Median income: $77,250
- Monthly income: $6,438
- 20% towards saving for down payment: $1,288
- Median home value: $449,576
- Mortgage down payment (20%): $89,915
- Loan amount: $359,661
- Months to save for down payment: 69.84
- Years to save: 5.8
- Monthly mortgage payment: $2,364
Oregon
- Median income: $87,664
- Monthly income: $7,305
- 20% towards saving for down payment: $1,461
- Median home value: $494,672
- Mortgage down payment (20%): $98,934
- Loan amount: $395,737
- Months to save for down payment: 67.71
- Years to save: 5.6
- Monthly mortgage payment: $2,601
Utah
- Median income: $91,937
- Monthly income: $7,661
- 20% towards saving for down payment: $1,532
- Median home value: $519,376
- Mortgage down payment (20%): $103,875
- Loan amount: $415,501
- Months to save for down payment: 67.79
- Years to save: 5.6
- Monthly mortgage payment: $2,731
Colorado
- Median income: $96,255
- Monthly income: $8,021
- 20% towards saving for down payment: $1,604
- Median home value: $550,945
- Mortgage down payment (20%): $110,189
- Loan amount: $440,756
- Months to save for down payment: 68.69
- Years to save: 5.7
- Monthly mortgage payment: $2,897
Washington
- Median income: $101,586
- Monthly income: $8,466
- 20% towards saving for down payment: $1,693
- Median home value: $589,240
- Mortgage down payment (20%): $117,848
- Loan amount: $471,392
- Months to save for down payment: 69.60
- Years to save: 5.8
- Monthly mortgage payment: $3,098
Massachusetts
- Median income: $110,567
- Monthly income: $9,214
- 20% towards saving for down payment: $1,843
- Median home value: $615,963
- Mortgage down payment (20%): $123,193
- Loan amount: $492,770
- Months to save for down payment: 66.85
- Years to save: 5.6
- Monthly mortgage payment: $3,239
District of Columbia (DC)
- Median income: $118,096
- Monthly income: $9,841
- 20% towards saving for down payment: $1,968
- Median home value: $718,017
- Mortgage down payment (20%): $143,603
- Loan amount: $574,414
- Months to save for down payment: 72.96
- Years to save: 6.1
- Monthly mortgage payment: $3,775
California
- Median income: $99,703
- Monthly income: $8,309
- 20% towards saving for down payment: $1,662
- Median home value: $785,333
- Mortgage down payment (20%): $157,067
- Loan amount: $628,267
- Months to save for down payment: 94.52
- Years to save: 7.9
- Monthly mortgage payment: $4,129
Hawaii
- Median income: $96,571
- Monthly income: $8,048
- 20% towards saving for down payment: $1,610
- Median home value: $967,270
- Mortgage down payment (20%): $193,454
- Loan amount: $773,816
- Months to save for down payment: 120.19
- Years to save: 10.0
- Monthly mortgage payment: $5,086
Methodology: To determine millennial home affordability, GOBankingRates evaluated median home value for each state in conjunction with each state’s median income for people ages 25 to 34. Assuming millennials put away 20 percent of their salary each month to save for a down payment on a home, GOBankingRates calculated (1) the amount of time it would take to afford a 20 percent down payment on a house with the median home value for each state. The (2) estimated monthly mortgage payment in every state was based on a 30-year, fixed-rate mortgage, with a fixed rate of 6.88% (the current national average according to the Federal Reserve Bank of St. Louis). Those two numbers– the time to save for a down and the mortgage payment amount– were scored to develop the final state affordability ranking. All data was collected on and up to date as of April 11, 2024.