How Much of Your Salary You’ll Need To Spend To Afford a House Across America
Do you know the average salary to afford a house in your state?
Cameron Huddleston
Life and Money Columnist
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If you’re thinking about buying a house this year, there is good news and bad news.
Mortgage rates are expected to remain low in 2020, according to forecasts by real estate marketplace Zillow. That’s good news for people who plan to borrow money to buy a house.
However, the bad news is that home prices will continue to rise — albeit, at a slower pace than last year, according to Zillow. That could make coming up with a 20% down payment on a home difficult for buyers, especially in expensive markets. And high home prices could put monthly mortgage payments out of reach for many — even though mortgage interest rates are low.
The rule of thumb is that you shouldn’t spend more than 30% of your income on housing. Families who spend more than that are considered cost-burdened and may have trouble paying for other necessities, according to the U.S. Department of Housing and Urban Development. Sticking to that rule of thumb, though, can be a challenge in some parts of the country where home prices are high and median household incomes aren’t quite high enough to make the math work, according to a new GOBankingRates study.
GOBankingRates found what percentage of income would go toward paying a mortgage in each state using the following data:
- The median home value in each state, according to Zillow’s October 2019 housing data
- The median property tax rate in each state, according to Tax-Rates.org
- The national average 30-year fixed mortgage rate, according to the Federal Reserve Bank of St. Louis
- Median monthly and annual household income in each state, according to the Census Bureau
Zillow’s mortgage calculator was used to estimate monthly mortgage payments for each state based on median home values, tax rates and a 20% down payment. Then GOBankingRates calculated what percentage of the median household income that the estimated mortgage payments would be and ranked the states from lowest to highest percentage.
GOBankingRates also calculated the salary needed to afford a home using the mortgage payment estimate and the annual cost of necessities based on data from the Census Bureau and the Missouri Economic Research and Information Center. That number was doubled to find the annual salary needed in every state to satisfy the 50/30/20 rule, which recommends that necessities make up 50% of a household budget.
The study found that, for the most part, a smaller salary is needed to afford a home in the South and Midwest. States in the West and Northeast tend to require higher salaries because home prices are higher. And there are some places where you won’t be able to afford a home unless you earn more than the median income.
Last updated: Jan. 15, 2020
West Virginia
- Median home value: $99,700
- 20% down payment: $19,940
- Median property tax rate: 0.49%
- Median annual mortgage: $4,908
- Median annual household income: $44,097
- Annual necessary expenditures: $21,231.65
- Salary needed to afford a home: $42,463.30
- Monthly income needed to afford a home: $3,539
Mortgage as a percentage of income: 11.13%
Oklahoma
- Median home value: $125,800
- 20% down payment: $25,160
- Median property tax rate: 0.74%
- Median annual mortgage: $6,516
- Median annual household income: $51,924
- Annual necessary expenditures: $23,815.65
- Salary needed to afford a home: $47,631.29
- Monthly income needed to afford a home: $3,969
Mortgage as a percentage of income: 12.55%
Alabama
- Median home value: $135,500
- 20% down payment: $27,100
- Median property tax rate: 0.33%
- Median annual mortgage: $6,456
- Median annual household income: $49,861
- Annual necessary expenditures: $23,944.24
- Salary needed to afford a home: $47,888.48
- Monthly income needed to afford a home: $3,991
Mortgage as a percentage of income: 12.95%
Arkansas
- Median home value: $129,800
- 20% down payment: $25,960
- Median property tax rate: 0.52%
- Median annual mortgage: $6,432
- Median annual household income: $47,062
- Annual necessary expenditures: $22,584.54
- Salary needed to afford a home: $45,169.08
- Monthly income needed to afford a home: $3,764
Mortgage as a percentage of income: 13.67%
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Kansas
- Median home value: $141,500
- 20% down payment: $28,300
- Median property tax rate: 1.29%
- Median annual mortgage: $8,100
- Median annual household income: $58,218
- Annual necessary expenditures: $25,868.10
- Salary needed to afford a home: $51,736.19
- Monthly income needed to afford a home: $4,311
Mortgage as a percentage of income: 13.91%
Iowa
- Median home value: $146,900
- 20% down payment: $29,380
- Median property tax rate: 1.29%
- Median annual mortgage: $8,412
- Median annual household income: $59,955
- Annual necessary expenditures: $26,714.38
- Salary needed to afford a home: $53,428.75
- Monthly income needed to afford a home: $4,452
Mortgage as a percentage of income: 14.03%
Indiana
- Median home value: $148,500
- 20% down payment: $29,700
- Median property tax rate: 0.85%
- Median annual mortgage: $7,848
- Median annual household income: $55,746
- Annual necessary expenditures: $25,810.79
- Salary needed to afford a home: $51,621.58
- Monthly income needed to afford a home: $4,302
Mortgage as a percentage of income: 14.08%
Louisiana
- Median home value: $147,900
- 20% down payment: $29,580
- Median property tax rate: 0.18%
- Median annual mortgage: $6,828
- Median annual household income: $47,905
- Annual necessary expenditures: $24,557.95
- Salary needed to afford a home: $49,115.89
- Monthly income needed to afford a home: $4,093
Mortgage as a percentage of income: 14.25%
Mississippi
- Median home value: $129,700
- 20% down payment: $25,940
- Median property tax rate: 0.52%
- Median annual mortgage: $6,432
- Median annual household income: $44,717
- Annual necessary expenditures: $23,315.42
- Salary needed to afford a home: $46,630.85
- Monthly income needed to afford a home: $3,886
Mortgage as a percentage of income: 14.38%
Ohio
- Median home value: $143,300
- 20% down payment: $28,660
- Median property tax rate: 1.36%
- Median annual mortgage: $8,304
- Median annual household income: $56,111
- Annual necessary expenditures: $26,298.48
- Salary needed to afford a home: $52,596.95
- Monthly income needed to afford a home: $4,383
Mortgage as a percentage of income: 14.80%
Kentucky
- Median home value: $149,300
- 20% down payment: $29,860
- Median property tax rate: 0.72%
- Median annual mortgage: $7,692
- Median annual household income: $50,247
- Annual necessary expenditures: $25,152.73
- Salary needed to afford a home: $50,305.46
- Monthly income needed to afford a home: $4,192
Mortgage as a percentage of income: 15.31%
Missouri
- Median home value: $163,700
- 20% down payment: $32,740
- Median property tax rate: 0.91%
- Median annual mortgage: $8,748
- Median annual household income: $54,478
- Annual necessary expenditures: $26,770.96
- Salary needed to afford a home: $53,541.92
- Monthly income needed to afford a home: $4,462
Mortgage as a percentage of income: 16.06%
South Carolina
- Median home value: $171,800
- 20% down payment: $34,360
- Median property tax rate: 0.50%
- Median annual mortgage: $8,484
- Median annual household income: $52,306
- Annual necessary expenditures: $26,511.55
- Salary needed to afford a home: $53,023.11
- Monthly income needed to afford a home: $4,419
Mortgage as a percentage of income: 16.22%
Michigan
- Median home value: $154,700
- 20% down payment: $30,940
- Median property tax rate: 1.62%
- Median annual mortgage: $9,372
- Median annual household income: $56,697
- Annual necessary expenditures: $27,266.08
- Salary needed to afford a home: $54,532.17
- Monthly income needed to afford a home: $4,544
Mortgage as a percentage of income: 16.53%
Tennessee
- Median home value: $172,000
- 20% down payment: $34,400
- Median property tax rate: 0.68%
- Median annual mortgage: $8,796
- Median annual household income: $52,375
- Annual necessary expenditures: $25,511.50
- Salary needed to afford a home: $51,023.00
- Monthly income needed to afford a home: $4,252
Mortgage as a percentage of income: 16.79%
Pennsylvania
- Median home value: $177,500
- 20% down payment: $35,500
- Median property tax rate: 1.35%
- Median annual mortgage: $10,272
- Median annual household income: $60,905
- Annual necessary expenditures: $29,443.59
- Salary needed to afford a home: $58,887.18
- Monthly income needed to afford a home: $4,907
Mortgage as a percentage of income: 16.87%
Illinois
- Median home value: $184,000
- 20% down payment: $36,800
- Median property tax rate: 1.73%
- Median annual mortgage: $11,340
- Median annual household income: $65,030
- Annual necessary expenditures: $30,205.04
- Salary needed to afford a home: $60,410.07
- Monthly income needed to afford a home: $5,034
Mortgage as a percentage of income: 17.44%
Georgia
- Median home value: $195,500
- 20% down payment: $39,100
- Median property tax rate: 0.83%
- Median annual mortgage: $10,296
- Median annual household income: $58,756
- Annual necessary expenditures: $27,967.34
- Salary needed to afford a home: $55,934.67
- Monthly income needed to afford a home: $4,661
Mortgage as a percentage of income: 17.52%
Nebraska
- Median home value: $170,100
- 20% down payment: $34,020
- Median property tax rate: 1.76%
- Median annual mortgage: $10,536
- Median annual household income: $59,566
- Annual necessary expenditures: $28,199.42
- Salary needed to afford a home: $56,398.83
- Monthly income needed to afford a home: $4,700
Mortgage as a percentage of income: 17.69%
Delaware
- Median home value: $237,200
- 20% down payment: $47,440
- Median property tax rate: 0.43%
- Median annual mortgage: $11,544
- Median annual household income: $64,805
- Annual necessary expenditures: $30,847.85
- Salary needed to afford a home: $61,695.70
- Monthly income needed to afford a home: $5,141
Mortgage as a percentage of income: 17.81%
North Carolina
- Median home value: $191,400
- 20% down payment: $38,280
- Median property tax rate: 0.78%
- Median annual mortgage: $9,984
- Median annual household income: $53,855
- Annual necessary expenditures: $28,434.47
- Salary needed to afford a home: $56,868.95
- Monthly income needed to afford a home: $4,739
Mortgage as a percentage of income: 18.54%
Maryland
- Median home value: $292,300
- 20% down payment: $58,460
- Median property tax rate: 0.87%
- Median annual mortgage: $15,504
- Median annual household income: $83,242
- Annual necessary expenditures: $34,806.30
- Salary needed to afford a home: $69,612.60
- Monthly income needed to afford a home: $5,801
Mortgage as a percentage of income: 18.63%
Minnesota
- Median home value: $240,800
- 20% down payment: $48,160
- Median property tax rate: 1.05%
- Median annual mortgage: $13,212
- Median annual household income: $70,315
- Annual necessary expenditures: $32,350.87
- Salary needed to afford a home: $64,701.75
- Monthly income needed to afford a home: $5,392
Mortgage as a percentage of income: 18.79%
Virginia
- Median home value: $266,300
- 20% down payment: $53,260
- Median property tax rate: 0.74%
- Median annual mortgage: $13,776
- Median annual household income: $72,577
- Annual necessary expenditures: $31,447.30
- Salary needed to afford a home: $62,894.60
- Monthly income needed to afford a home: $5,241
Mortgage as a percentage of income: 18.98%
North Dakota
- Median home value: $209,600
- 20% down payment: $41,920
- Median property tax rate: 1.42%
- Median annual mortgage: $12,276
- Median annual household income: $63,837
- Annual necessary expenditures: $31,453.56
- Salary needed to afford a home: $62,907.12
- Monthly income needed to afford a home: $5,242
Mortgage as a percentage of income: 19.23%
Wyoming
- Median home value: $237,100
- 20% down payment: $47,420
- Median property tax rate: 0.58%
- Median annual mortgage: $11,892
- Median annual household income: $61,584
- Annual necessary expenditures: $29,535.88
- Salary needed to afford a home: $59,071.76
- Monthly income needed to afford a home: $4,923
Mortgage as a percentage of income: 19.31%
Connecticut
- Median home value: $245,000
- 20% down payment: $49,000
- Median property tax rate: 1.63%
- Median annual mortgage: $14,856
- Median annual household income: $76,348
- Annual necessary expenditures: $36,126.91
- Salary needed to afford a home: $72,253.83
- Monthly income needed to afford a home: $6,021
Mortgage as a percentage of income: 19.46%
Wisconsin
- Median home value: $192,900
- 20% down payment: $38,580
- Median property tax rate: 1.76%
- Median annual mortgage: $11,952
- Median annual household income: $60,773
- Annual necessary expenditures: $30,782.02
- Salary needed to afford a home: $61,564.04
- Monthly income needed to afford a home: $5,130
Mortgage as a percentage of income: 19.67%
South Dakota
- Median home value: $195,700
- 20% down payment: $39,140
- Median property tax rate: 1.28%
- Median annual mortgage: $11,184
- Median annual household income: $56,274
- Annual necessary expenditures: $29,031.92
- Salary needed to afford a home: $58,063.84
- Monthly income needed to afford a home: $4,839
Mortgage as a percentage of income: 19.87%
Texas
- Median home value: $200,100
- 20% down payment: $40,020
- Median property tax rate: 1.81%
- Median annual mortgage: $12,492
- Median annual household income: $60,629
- Annual necessary expenditures: $30,023.90
- Salary needed to afford a home: $60,047.79
- Monthly income needed to afford a home: $5,004
Mortgage as a percentage of income: 20.60%
New Mexico
- Median home value: $196,300
- 20% down payment: $39,260
- Median property tax rate: 0.55%
- Median annual mortgage: $9,780
- Median annual household income: $47,169
- Annual necessary expenditures: $27,481.60
- Salary needed to afford a home: $54,963.21
- Monthly income needed to afford a home: $4,580
Mortgage as a percentage of income: 20.73%
Vermont
- Median home value: $210,700
- 20% down payment: $42,140
- Median property tax rate: 1.59%
- Median annual mortgage: $12,696
- Median annual household income: $60,782
- Annual necessary expenditures: $33,082.33
- Salary needed to afford a home: $66,164.66
- Monthly income needed to afford a home: $5,514
Mortgage as a percentage of income: 20.89%
Arizona
- Median home value: $258,700
- 20% down payment: $51,740
- Median property tax rate: 0.72%
- Median annual mortgage: $13,332
- Median annual household income: $59,246
- Annual necessary expenditures: $32,034.18
- Salary needed to afford a home: $64,068.36
- Monthly income needed to afford a home: $5,339
Mortgage as a percentage of income: 22.50%
Montana
- Median home value: $241,700
- 20% down payment: $48,340
- Median property tax rate: 0.83%
- Median annual mortgage: $12,720
- Median annual household income: $55,328
- Annual necessary expenditures: $30,077.26
- Salary needed to afford a home: $60,154.52
- Monthly income needed to afford a home: $5,013
Mortgage as a percentage of income: 22.99%
Florida
- Median home value: $238,600
- 20% down payment: $47,720
- Median property tax rate: 0.97%
- Median annual mortgage: $12,900
- Median annual household income: $55,462
- Annual necessary expenditures: $31,386.49
- Salary needed to afford a home: $62,772.97
- Monthly income needed to afford a home: $5,231
Mortgage as a percentage of income: 23.26%
Maine
- Median home value: $237,100
- 20% down payment: $47,420
- Median property tax rate: 1.09%
- Median annual mortgage: $13,104
- Median annual household income: $55,602
- Annual necessary expenditures: $33,036.70
- Salary needed to afford a home: $66,073.41
- Monthly income needed to afford a home: $5,506
Mortgage as a percentage of income: 23.57%
New Hampshire
- Median home value: $281,600
- 20% down payment: $56,320
- Median property tax rate: 1.86%
- Median annual mortgage: $17,724
- Median annual household income: $74,991
- Annual necessary expenditures: $37,820.90
- Salary needed to afford a home: $75,641.81
- Monthly income needed to afford a home: $6,303
Mortgage as a percentage of income: 23.63%
Alaska
- Median home value: $326,300
- 20% down payment: $65,260
- Median property tax rate: 1.04%
- Median annual mortgage: $17,868
- Median annual household income: $74,346
- Annual necessary expenditures: $43,261.51
- Salary needed to afford a home: $86,523.01
- Monthly income needed to afford a home: $7,210
Mortgage as a percentage of income: 24.03%
Utah
- Median home value: $348,000
- 20% down payment: $69,600
- Median property tax rate: 0.60%
- Median annual mortgage: $17,520
- Median annual household income: $71,414
- Annual necessary expenditures: $35,482.96
- Salary needed to afford a home: $70,965.92
- Monthly income needed to afford a home: $5,914
Mortgage as a percentage of income: 24.53%
Idaho
- Median home value: $275,100
- 20% down payment: $55,020
- Median property tax rate: 0.69%
- Median annual mortgage: $14,100
- Median annual household income: $55,583
- Annual necessary expenditures: $31,648.82
- Salary needed to afford a home: $63,297.64
- Monthly income needed to afford a home: $5,275
Mortgage as a percentage of income: 25.37%
New Jersey
- Median home value: $330,000
- 20% down payment: $66,000
- Median property tax rate: 1.89%
- Median annual mortgage: $20,868
- Median annual household income: $81,740
- Annual necessary expenditures: $40,338.95
- Salary needed to afford a home: $80,677.89
- Monthly income needed to afford a home: $6,723
Mortgage as a percentage of income: 25.53%
New York
- Median home value: $305,800
- 20% down payment: $61,160
- Median property tax rate: 1.23%
- Median annual mortgage: $17,328
- Median annual household income: $67,844
- Annual necessary expenditures: $36,749.45
- Salary needed to afford a home: $73,498.90
- Monthly income needed to afford a home: $6,125
Mortgage as a percentage of income: 25.54%
Rhode Island
- Median home value: $285,500
- 20% down payment: $57,100
- Median property tax rate: 1.35%
- Median annual mortgage: $16,512
- Median annual household income: $64,340
- Annual necessary expenditures: $36,968.50
- Salary needed to afford a home: $73,937.00
- Monthly income needed to afford a home: $6,161
Mortgage as a percentage of income: 25.66%
Nevada
- Median home value: $292,900
- 20% down payment: $58,580
- Median property tax rate: 0.84%
- Median annual mortgage: $15,456
- Median annual household income: $58,646
- Annual necessary expenditures: $34,198.89
- Salary needed to afford a home: $68,397.77
- Monthly income needed to afford a home: $5,700
Mortgage as a percentage of income: 26.35%
Colorado
- Median home value: $385,200
- 20% down payment: $77,040
- Median property tax rate: 0.60%
- Median annual mortgage: $19,392
- Median annual household income: $71,953
- Annual necessary expenditures: $37,308.44
- Salary needed to afford a home: $74,616.88
- Monthly income needed to afford a home: $6,218
Mortgage as a percentage of income: 26.95%
Massachusetts
- Median home value: $410,200
- 20% down payment: $82,040
- Median property tax rate: 1.04%
- Median annual mortgage: $22,464
- Median annual household income: $79,835
- Annual necessary expenditures: $43,242.98
- Salary needed to afford a home: $86,485.95
- Monthly income needed to afford a home: $7,207
Mortgage as a percentage of income: 28.14%
Washington
- Median home value: $395,500
- 20% down payment: $79,100
- Median property tax rate: 0.92%
- Median annual mortgage: $21,180
- Median annual household income: $74,073
- Annual necessary expenditures: $41,291.17
- Salary needed to afford a home: $82,582.35
- Monthly income needed to afford a home: $6,882
Mortgage as a percentage of income: 28.59%
Oregon
- Median home value: $351,700
- 20% down payment: $70,340
- Median property tax rate: 0.87%
- Median annual mortgage: $18,660
- Median annual household income: $63,426
- Annual necessary expenditures: $39,280.69
- Salary needed to afford a home: $78,561.37
- Monthly income needed to afford a home: $6,547
Mortgage as a percentage of income: 29.42%
Hawaii
- Median home value: $622,700
- 20% down payment: $124,540
- Median property tax rate: 0.26%
- Median annual mortgage: $29,232
- Median annual household income: $80,212
- Annual necessary expenditures: $56,626.94
- Salary needed to afford a home: $113,253.88
- Monthly income needed to afford a home: $9,438
Mortgage as a percentage of income: 36.44%
California
- Median home value: $552,100
- 20% down payment: $110,420
- Median property tax rate: 0.74%
- Median annual mortgage: $28,572
- Median annual household income: $75,277
- Annual necessary expenditures: $50,637.65
- Salary needed to afford a home: $101,275.29
- Monthly income needed to afford a home: $8,440
Mortgage as a percentage of income: 37.96%
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Methodology: GOBankingRates used Zillow’s mortgage calculator to create (1) estimated monthly and annual mortgage payments for each state based on: (2) the state’s median home value according to Zillow’s October 2019 housing data, (3) each state’s median property tax rate according to Tax-Rates.org, (4) a 20% down payment estimate and (5) the national average 30-year fixed mortgage interest rate as of Dec. 12, 2019, according to the Federal Reserve Bank of St. Louis. GOBankingRates then compiled information on (6) each state’s median monthly and annual household income according to the 2018 American Community Survey. This allowed (7) the percent of total household income that the median mortgage would cost in each state to be calculated. States were then ranked according to factor No. 7, with No. 1 being the state where the median annual mortgage is smallest in proportion to the median annual household income.
Information on the necessary annual salary to cover necessities according to the 50/30/20 rule is provided as supplemental data. GOBankingRates found the average annual cost of necessities (including groceries, utilities, transportation and healthcare) in the U.S. from the Consumer Expenditure Survey and adjusted these estimates to the state level by multiplying each figure by the Missouri Economic Research and Information Center’s third quarter 2019 cost-of-living indices for each category in each state. GOBankingRates then added the annual mortgage estimate to find the total expected annual cost of necessities in every state, and doubled this number to find the annual salary one would need in every state to satisfy the 50/30/20 rule, which recommends that necessities comprise 50% of one’s total budget.
All data was compiled on and is up-to-date as of Dec. 17, 2019.
About the Author
Cameron Huddleston
Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.
U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.
She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.
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