Living on Social Security Only? 13 States Where You Can Afford To Buy a Home

Fairmont is a city in Marion County, West Virginia, United States.
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You think you’ve set yourself up for retirement well, with your debts paid off, a decent 401(k) balance and some money in the bank. You will be receiving monthly Social Security benefits, too. Your biggest worry is what you can’t plan for: a rent increase.

But depending on where you live — or where you might like to move — you might not have to pay rent. If you can fund a 10% down payment, you could buy an average-value home in 13 states, pay the mortgage with an average Social Security income and have at least $4,200 left at the end of the year.

To figure out where you could pay your mortgage payment on the average monthly Social Security benefit of $1,754.02, GOBankingRates found the average price of a single-family home in each state using the Zillow Home Value Index of June 2023, assumed a 10% down payment and calculated the interest using the national 30-year, fixed-rate mortgage rate.

Read on to learn more about how much of your Social Security benefits you’d spend each month in one of these 13 states.

13. Missouri

  • June 2023 home value: $239,743.46
  • 10% down payment: $23,974.30
  • 10% loan amount: $215,769.11
  • 10% monthly mortgage: $1,401.27
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $4,232.99

The U.S. Census Bureau defines Missouri as one of 12 states in the Midwest, and it is one of four straight midwestern locales on the list. Buying a home and living on Social Security benefits in Missouri is within reach, though you won’t have a ton of money left over at the end of the month. The difference between your mortgage payment and monthly benefit check is just $352.75.

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12. Michigan

  • June 2023 home value: $233,019.09
  • 10% down payment: $23,301.90
  • 10% loan amount: $209,717.18
  • 10% monthly mortgage: $1,361.97
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $4,704.63

The average home in Michigan costs just over $233,000, allowing you to live on Social Security benefits alone. But if you were looking to save money on your Michigan home and increase the money left from your benefits, consider Detroit. A separate GOBankingRates study showed that Detroit is the most affordable city for retirees to buy a house with an average home value of $63,661 in June.

11. Indiana

  • June 2023 home value: $232,389.62
  • 10% down payment: $23,239.00
  • 10% loan amount: $209,150.66
  • 10% monthly mortgage: $1,358.29
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $4,748.77

Indiana is slightly more affordable for homebuyers living on Social Security. While you still end up with less than $5,000 left over, there are cheaper areas that you could scout out to hold onto even more.

10. Ohio

  • June 2023 home value: $220,541.64
  • 10% down payment: $22,054.20
  • 10% loan amount: $198,487.48
  • 10% monthly mortgage: $1,289.04
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $5,579.77

Using the statewide average home value, Ohio is affordable for retirees living on a Social Security check only. Some cities are less expensive than others, however, with Akron, Cleveland, Dayton and Toledo offering some affordable options for retirees.

9. Alabama

  • June 2023 home value: $220,418.73
  • 10% down payment: $22,041.90
  • 10% loan amount: $198,376.86
  • 10% monthly mortgage: $1,288.32
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $5,588.40
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Alabama is the first of seven places in the South where Social Security benefits cover the monthly mortgage payment. After paying for housing, you’ll have close to $500 a month left for other household expenses.

8. Kansas

  • June 2023 home value: $216,131.49
  • 10% down payment: $21,613.10
  • 10% loan amount: $194,518.34
  • 10% monthly mortgage: $1,263.26
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $5,889.10

If Midwest living really is more your style, Kansas is an option, with housing prices in June averaging just over $216,000. The average mortgage payment is a bit over $1,260.

7. Iowa

  • June 2023 home value: $215,457.59
  • 10% down-payment: $21,545.80
  • 10% loan amount: $193,911.83
  • 10% monthly mortgage: $1,259.32
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $5,936.36

East of Kansas is Iowa, the final midwestern city in the study. The cost of owning a home is remarkably similar between the two states, with your monthly mortgage payments separated by less than $5.

6. Kentucky

  • June 2023 home value: $201,033.42
  • 10% down payment: $20,103.30
  • 10% loan amount: $180,930.08
  • 10% monthly mortgage: $1,175.02
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $6,948.05

States classified as being in the South occupy the rest of the list — and there’s a big jump in the difference between Social Security benefits and that 10% mortgage in the South compared to the Midwest. You’ll have nearly $7,000 left at the end of the year if you pay a mortgage in Kentucky, which is $1,000 more than in Iowa.

5. Louisiana

  • June 2023 home value: $200,946.71
  • 10% down payment: $20,094.70
  • 10% loan amount: $180,852.04
  • 10% monthly mortgage: $1,174.51
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $6,954.13

Considering both Kentucky and Louisiana as a place to retire? Your decision won’t come down to housing costs. Your mortgage payment differs by just 50 cents per month between the states.

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4. Oklahoma

  • June 2023 home value: $200,202.74
  • 10% down payment: $20,020.30
  • 10% loan amount: $180,182.47
  • 10% monthly mortgage: $1,170.16
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $7,006.32

Oklahoma is the westernmost state when it comes to affordability for those who live on their Social Security benefits. You’ll have almost $600 left each month after paying the mortgage.

3. Arkansas

  • June 2023 home value: $199,283.55
  • 10% down payment: $19,928.40
  • 10% loan amount: $179,355.20
  • 10% monthly mortgage: $1,164.79
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $7,070.79

Arkansas is the first state in the study with home values of less than $200,000, with just two states with lower prices.

2. Mississippi

  • June 2023 home value: $171,997.61
  • 10% down payment: $17,199.80
  • 10% loan amount: $154,797.85
  • 10% monthly mortgage: $1,005.30
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $8,984.58

Arkansas and Mississippi are neighbors, but there’s a gulf between them when it comes to average mortgage payments. With average home prices nearly $30,000 less than in Mississippi, you’ll have about $1,900 more left in your pocket after 12 months.

1. West Virginia

  • June 2023 home value: $155,687.30
  • 10% down payment: $15,568.70
  • 10% loan amount: $140,118.57
  • 10% monthly mortgage: $909.97
  • Annual benefits from Social Security: $21,048.24
  • Social Security benefits difference from 10% mortgage: $10,128.56

If your monthly mortgage payment is the No. 1 factor in deciding where to settle down and buy a home in retirement, West Virginia is tops. It’s the state in the study with a monthly mortgage payment of less than $1,000, and at about $910 a month, it’s just a little more than half the amount of the average Social Security benefits check.

More From GOBankingRates

Are You Retirement Ready?

Methodology: To find the states where you can afford to buy a home with only Social Security income, GOBankingRates found the average price of a single-family home in each state using the Zillow Home Value Index. Assuming a 10% down payment, the national 30-year, fixed-rate mortgage rate, sourced from the Federal Reserve Economic Research, was used to calculate the annual mortgage cost for each state. The annual Social Security benefit was sourced from the Social Security Administration benefits summary. The data was sorted to show the states where the most money can be saved. All data is up to date as of July 25, 2023.

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