In this article, we will be analyzing the US housing market crisis while covering the 20 states with the highest average home prices in the US. If you wish to skip our detailed analysis, you can move directly to the 5 States with the Highest Average Home Prices.
A Rigid National Housing Crisis
The US housing market continues to be a victim of a rigid affordability crisis. This is because prices keep on rising while the existing supply of houses cannot cater to the high demand. On October 20, CNN reported that the home sales hit a 13-year low in September. A large proportion of would-be buyers have been unable to attain a home due to soaring interest rates in addition to highly-priced houses. The monthly payment on an average-priced home requires 40% of the median household income. Some of the most overpriced housing markets in the US have also been previously covered. As median home prices continue to climb, Americans who were looking to buy a house are considering renting one instead. However, the rental market doesn’t offer any bright prospects either. This is because new construction is concentrated in certain metro areas or it is high-end. Hence, affordable housing units still tend to be unavailable for many. Those residing in states such as Florida which have high costs of housing, have less income to spend on other requirements after paying for rent.
The housing market’s return to normal seems to be challenging since it requires a significant drop in house prices and mortgage rates. While those who aspire to buy houses wait for the market to offer reasonably priced homes, existing homeowners are holding houses since they will have to pay a higher mortgage to acquire a new house.
Reasonable Options for Homebuyers
Amid rising home prices, several home builders offer affordable housing to cater to the diverse needs of homebuyers. Some of these include Lennar Corporation (NYSE:LEN), KB Home (NYSE:KBH), and PulteGroup, Inc. (NYSE:PHM). Let’s take a look at what these firms have been up to in the states deemed expensive for housing.
Lennar Corporation (NYSE:LEN) is an American home construction company that constructs affordable, move-up, and active adult homes primarily under the Lennar brand name. It also engages in the development of high-quality multifamily rental properties. On November 28, the company reported the first release of a new series of affordable single-family homes available in three communities across California’s Central Valley, particularly in Shafter, Fresno, and Clovis. The prices for these new homes start from the mid $300,000s. The three communities from Lennar Corporation (NYSE:LEN) are also located close to schools and outdoor spaces.
KB Home (NYSE:KBH) is one of the largest homebuilders in the United States. The firm builds quality homes that are customized as per the buyer’s preference and available budget. On December 1, KB Home (NYSE:KBH) reported the opening of its latest new home community in Flagler Beach, Florida. The residents of these new one-and-two-story homes can easily access local beaches located minutes away. Nearby shopping and dining options can also be availed. Pricing for these houses begins from the mid $300,000s.
PulteGroup, Inc. (NYSE: PHM) operates Pulte Homes which constructs consumer-inspired homes and communities in more than 40 markets across the US. On November 29, the company reported its return to the Salt Lake City market in Utah. PulteGroup, Inc. (NYSE: PHM) is constructing two new communities in the region which are expected to open in early 2024. The new single-family homes and townhomes will be located in Jordanelle Ridge which offers convenient access to ski resorts, restaurants, golf courses, and state parks. Residents will also be able to enjoy the views of the Jordanelle Reservoir and Wasatch Mountain Range.
You can also take a look at underpriced housing markets in the US. Now that we have taken a look at the US housing market, let’s move to the 20 states with the highest average home prices.
Our Methodology:
In order to compile a list of the 20 states with the highest average home prices, we sourced data from Zillow, a leading real estate source. We used the average home value in every state as our metric. The most recent data on this metric was available as of October 2023.
Finally, we ranked all US states in ascending order of their average home prices.
20 States with the Highest Average Home Prices
20. Connecticut
Average Home Price: $381,629
The housing supply in Connecticut has not been able to fulfill the demand. The home prices have also been ahead of the median incomes. The state is located close to New York which results in higher home prices. As of October, the average home price in Connecticut was $381,629 which makes it another US state with high median home prices.
19. Vermont
Average Home Price: $384,155
Vermont ranks among the US states with the highest average home prices. The state recorded an average home price of $384,155 in October. Property prices have risen at a faster rate since the beginning of the pandemic in Vermont.
18. Maine
Average Home Price: $386,588
With an average home price of $386,588, Maine becomes one of the 20 states with the highest average home price. This average home price went up 7.4% year-over-year. The increased home prices have resulted in a decrease in sales volume in Maine.
17. Florida
Average Home Price: $392,904
With an average home price of $392,904 as recorded in October, Florida ranks as another US state that has relatively higher average home prices. This has led to an inability to afford a home in the state. Homes in Miami and Tampa also experienced an increase in their median prices.
16. Maryland
Average Home Price: $404,252
Maryland’s proximity to the US capital makes it a popular choice among homebuyers. However, the limited supply and rising house prices have left fewer options. As of October, the average home price in Maryland was $404,252. This ranks the state among the other states with the highest average home prices.
15. Nevada
Average Home Price: $418,964
Over the last decade, Nevada has witnessed a high increase in home prices. The prices for townhomes and condos in Southern Nevada are especially high. A tight housing supply is also creating problems for those who wish to buy a home in Nevada. As of October, the average home price in the state was $418,964.
14. Arizona
Average Home Price: $423,568
Arizona is one of those states where home prices are rising faster as compared to wages. This has raised concerns related to housing affordability in the state. As of October, the average home price in Arizona was $423,568 which makes it another US state with high average home prices.
13. Rhode Island
Average Home Price: $436,520
Single-family, multi-family, and condos continue to be competitive segments in Rhode Island’s housing market. The average home price in the state was recorded at $436,520, as of October. This makes Rhode Island one of the states with the highest average home prices in the country.
12. Idaho
Average Home Price: $442,087
Idaho has seen a rise in its home prices since the pandemic began. The state’s real estate market remains overvalued. As of October, the average home price in Idaho was $442,087 which makes it another US state with a high average home price.
11. Montana
Average Home Price: $447,822
Montana makes it to the 20 states with the highest average home prices. The median home value in the state is higher than the median income. The home prices are higher than the pre-pandemic levels and even above the national average. As of October, the average home price in Montana was as high as $447,822.
10. New Hampshire
Average Home Price: $448,251
With an average home price of $448,251, as recorded in October, New Hampshire ranks as one of the states with high average home prices. As a result of low inventory in the state, buying or renting out a place has been increasingly hard.
9. New York
Average Home Price: $452,476
New York ranks among the 20 states with the highest average home prices. While high interest rates keep homebuyers on hold, the existing low inventory of houses remains unable to fulfill the high demand. Manhattan also serves as an expensive housing market. As of October, the average home price in New York was $452,476.
8. Oregon
Average Home Price: $487,750
A limited supply of houses has led to high prices for affordable real estate in Oregon thereby making it another state with high average home prices. Cities with the fastest-growing home prices in Oregon include Toledo, Donald, Lakeview, and Canyonville. As of October, the average home price in Oregon was $487,750.
7. New Jersey
Average Home Price: $495,846
The average home price in New Jersey was $495,846, as of October. The house prices in the state are rising at a high rate as compared to the rest of the US. The state’s proximity to New York City and its dense population drives the prices up.
6. Utah
Average Home Price: $510,836
Utah is one of the 20 states with the highest average home prices. As of October, the average home price in the state was $510,836. Many of those wishing to buy a house have been in difficulty due to high prices and interest rates. Homes in Salt Lake County are especially expensive.
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Disclosure: None. 20 States with the Highest Average Home Prices is originally published on Insider Monkey.