By Dr Denver H. Bubble
HowMuch.net recently calculated how much income is needed to afford the average house in each state. Our home state of Colorado was in the top five expensive states thanks to the metro Denver region.
HowMuch.net collected from Zillow.com average home prices for each state, which was then plugged into a mortgage calculator to determine monthly payments. It is important to note that mortgage payments consist of both repayment of the principal balance and interest owed. The interest rate used by HowMuch.net was between 4% and 5%, depending on the state. They also assumed a 10% down payment. Below is their findings.
Top Five Places Where You Need the Highest Salaries to Afford the Average Home
1. Hawaii: $153,520 for a house worth $610,000
2. Washington, DC: $138,440 for a house worth $549,000
3. California: $120,120 for a house worth $499,900
4. Massachusetts: $101,320 for a house worth $419,900
5. Colorado: $100,200 for a house worth $415,000
Top Five Places Where You Need the Lowest Salaries to Afford the Average Home
1. West Virginia: $38,320 for a house worth $149,500
2. Ohio: $38,400 for a house worth $149,900
3. Michigan: $40,800 for a house worth $160,000
4. Arkansas: $41,040 for a house worth $161,000
5. Missouri: $42,200 for a house worth $165,900
Colorado stands out as the only landlocked state requiring a significant amount of income ($100,200), thanks in large part to the housing market around our home market of the metro Denver area. The price of housing is being driven from a lack of supply, but as the map shows there are still areas of affordability around the country if you are feeling blue about buying into the overpriced metro Denver market.