We used the standard 28% rule — your monthly housing payment (mortgage + tax + insurance) shouldn't exceed 28% of your gross monthly income. Then we applied current 7% mortgage rates to each state's median home price with 20% down.
The most expensive (you need to earn):
Hawaii: $191,000/year (median home: $830,000) California: $171,000/year (median home: $785,000) Massachusetts: $138,000/year (median home: $595,000) Washington: $131,000/year (median home: $580,000) Colorado: $120,000/year (median home: $520,000)
The most affordable:
West Virginia: $43,000/year (median home: $155,000) Mississippi: $49,000/year (median home: $175,000) Arkansas: $55,000/year (median home: $195,000) Oklahoma: $58,000/year (median home: $210,000) Iowa: $59,000/year (median home: $210,000)
The gap is staggering: You need 4.4x more income to afford a median home in Hawaii vs West Virginia. The American dream of homeownership isn't one dream — it's 50 very different ones depending on where you live.
The states where reality hurts the most:
These are states where the median household income falls short of what you'd need to afford the median home:
California: median income $78,000, need $171,000. Shortfall: $93,000. Hawaii: median income $72,000, need $191,000. Shortfall: $119,000. Massachusetts: median income $82,000, need $138,000. Shortfall: $56,000. New York: median income $68,000, need $102,000. Shortfall: $34,000.
In 23 states, the median household income is enough to afford the median home. In 27 states, it isn't.
But there's a catch: Property taxes change these numbers significantly. Texas has affordable home prices but 1.8% property tax effectively adds $450/month to a $300K house. Compare the full picture — mortgage, taxes, insurance, and take-home pay — and the rankings shift.
Calculate affordability for your salary and state:
See what your salary is actually worth after taxes:
Next week: I analyzed 775 cities and found the 10 best for first-time real estate investors in 2026.
— The Numbers Letter