In this article, we will be navigating through the US real estate market while covering the 15 states with the highest housing costs in the US. If you wish to skip our detailed analysis, you can move directly to the 5 States with the Highest Housing Costs in the US.
Housing Analysis Across the US
The current US housing scenario appears to be better than the crises witnessed during 2023. While builder confidence improved as the new year commenced, new construction reached its highest level since April 2022. The spring homebuying season further adding to the inventory of homes priced in an affordable range is a positive sign for homebuyers which have long been pushed outside the market. According to a report by Zillow, new listings are significant in the South, in the states of Texas and Florida. The annual increases in inventory have been recorded in Dallas, Tampa, Orlando, and Miami.
In terms of affordability, the income required to afford a home has gone up by 80% since 2020. Home prices have been reported to increase by 42.4% while the monthly mortgage payment on a typical home has doubled since that period, according to Zillow. The dilemma is that wages have not grown in the same way. More than half of American households could afford to own a home in 2020. However, the amount needed to afford a typical mortgage payment on a home currently exceeds the US average annual income. Expensive metros in this regard include San Jose, San Francisco, Los Angeles, and San Diego. You can also take a look at other overpriced housing markets in America. On the contrary, Pittsburgh, Memphis, Cleveland, and New Orleans are places where homebuyers can afford homes relatively easily. Cities where home prices are falling the most have also been previously discussed.
Overall, issues such as a lack of housing inventory and affordability continue to prevail. While the rebound in the US real estate market is being discussed to analyze if it will last for long or would simply be a temporary sigh of relief, the rental market needs to be considered fundamental. Many would-be buyers are still considering renting instead of buying as the market unfolds since it is a cheaper option. Single-family rents and apartment rents have increased since 2023. The median rent has declined in the South due to the increase in the supply of new multifamily housing. Rents have also grown in the Midwest where rental demand is high since unemployment rates are low. Rents in the West have also increased due to the high demand and issues related to housing affordability. At the same time, the median rent has declined in the South due to the increase in the supply of new multifamily housing.
Top Homebuilders in the US
Despite the aforementioned challenges, some of the largest homebuilders in the US including Dream Finders Homes, Inc. (NASDAQ:DFH), Tri Pointe Homes, Inc. (NYSE:TPH), and LGI Homes, Inc. (NASDAQ:LGIH) continue to offer convenient housing options for people to settle in desirable locations across the states. Let’s take a look at the recent developments from these firms.
Dream Finders Homes, Inc. (NASDAQ:DFH) engages in the construction of single-family homes in Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, and the Washington, D.C. metropolitan area. On March 21, Dream Finders Homes, Inc. (NASDAQ:DFH) reported the development of Bungalow Walk at Waterside, its new community in Lakewood Ranch. Community sales will start in early April. Downtown Sarasota and Siesta Key can be visited while staying in the community. Other details about the new community and pricing will be disclosed once sales begin.
Tri Pointe Homes, Inc. (NYSE:TPH) is one of the largest American homebuilders and constructs premium homes and communities in 10 states. On March 6, the company reported the opening of a Charlotte-based 120-home neighborhood, Context at Oakhurst. Tri Pointe Homes, Inc. (NYSE:TPH) has collaborated with Bobby Berk on three fresh homes which now serve as the first-ever model homes designed by the design expert in Charlotte. Amenities in Uptown Charlotte can be conveniently accessed. Prices begin at the mid-$400,000s and the model homes are currently open for tours.
LGI Homes, Inc. (NASDAQ:LGIH) engages in the design, construction, and sale of homes across 36 markets in 21 states. The company has closed more than 65,000 homes in its history. On March 4, LGI Homes, Inc. (NASDAQ:LGIH) reported that the company’s luxury brand will be selling homes in its new community in Seattle, Washington. The community ‘Skyway Village’ enables residents to easily commute to Renton, Bellevue, and downtown Seattle. The new homes at Skyway Village have been priced starting from the $970,000s. Buyers interested in settling in this Seattle community can also avail of move-in ready opportunities.
Now that we have analyzed the real estate market across the US states, let’s move to the 15 states with the highest housing costs in the country.
15 States with the Highest Housing Costs in the US
Our Methodology:
In order to compile a list of the 15 states with the highest housing costs in the US, we sourced the primary cost of housing ‘the typical home value’ from Zillow. Median monthly housing expenses also need to be taken into consideration since they are significant costs after buying the home. For this purpose, we acquired the median monthly housing costs from the US Census Bureau. Using the CPI Inflation Calculator from the Bureau of Labor Statistics, we adjusted these monthly housing costs from 2021 to 2023 dollars to account for inflation. To keep our metrics uniform, the typical home values have also been acquired, as of December 2023.
Finally, we ranked the 15 states with the highest housing costs in the US based on their typical home values and median monthly housing costs, as of 2023.
15 States with the Highest Housing Costs in the US
15. Nevada
Typical Home Value: $422,949
Median Monthly Housing Cost: $1,473
The state of Nevada is situated in the Western region of the US. The state boasts an average home value of $422,949, one of the highest among the US states. The average monthly housing expenditure in the state is $1,473. Hence, Nevada ranks as one of the states with the highest housing costs in the United States.
14. Arizona
Typical Home Value: $425,876
Median Monthly Housing Cost: $1,344
Arizona ranks as another state that has high housing costs to offer. The Southwestern region of the US hosts the state. As of December 2023, the typical home value in Arizona is $425,876. The median monthly cost for the state was recorded at $1,344.
13. Rhode Island
Typical Home Value: $435,906
Median Monthly Housing Cost: $1,571
The average home value was $435,906 in Rhode Island in December 2023. Additionally, the residents of the state spend an average of $1,571 on median monthly housing expenses. This proves that the overall housing costs in Rhode Island are high.
12. Idaho
Typical Home Value: $443,453
Median Monthly Housing Cost: $1,185
The landlocked state of Idaho is based in the Mountain West subregion of the United States. As of 2023, the average housing expenses in the state amount to $1,185. Simultaneously, Idaho offers a typical home value of $443,453 which is relatively high as compared to numerous other states.
11. Montana
Typical Home Value: $445,808
Median Monthly Housing Cost: $1,044
Bordering Idaho to the West, the US state of Montana ranks as another state with high housing costs. While the typical home value in Montana is $445,808, those residing in the state incur a median monthly housing expenditure of $1,044.
10. New York
Typical Home Value: $449,149
Median Monthly Housing Cost: $1,626
As of 2023, the median monthly housing expense in New York is $1,626. The state boasts a typical home value of $449,149 which ranks it as one of the 15 states with the highest housing costs in the United States.
9. New Hampshire
Typical Home Value: $452,420
Median Monthly Housing Cost: $1,628
The 15 states with the highest housing costs in the US rank New Hampshire as well. The state is situated in the New England region of the Northeastern United States. As of 2023, the median monthly housing cost in the state is $1,628 while the typical home value is $452,420.
8. Oregon
Typical Home Value: $487,297
Median Monthly Housing Cost: $1,512
The Pacific Northwest region of the US hosts Oregon. The state records a typical home value of $487,297 as of December 2023. On average, the people in Oregon spend $1,512 on monthly housing costs. Therefore, Oregon is another state with relatively higher housing costs.
7. New Jersey
Typical Home Value: $497,396
Median Monthly Housing Cost: $1,902
Positioned within the Mid-Atlantic and Northeastern regions of the US, New Jersey is a US state boasting high housing costs. While the typical home value in the state was reported to be $497,396, the median monthly housing expenditure was relatively high.
6. Utah
Typical Home Value: $509,715
Median Monthly Housing Cost: $1,469
Utah is another landlocked US state which ranks among the 15 states where housing costs are high. As of 2023, the state records a median monthly housing cost of $1,469. The typical home value in Utah was recorded at $509,715 in December 2023.
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Disclosure: None. 15 States with the Highest Housing Costs in the US is originally published on Insider Monkey.