Americans spend more on housing than any other expense, with an average of 35% of income dedicated to housing costs. Homeownership allows households to invest a portion of that money into a tangible asset that appreciates over time. For this reason, 91% of Americans indicate that they would like to own a home in their lifetime.
However, the costs of homeownership in the United States can be startling. According to Federal Reserve Economic Data, the median price of houses sold in 2022 is $428,700. The average sales price in the same period is higher, at $507,800. The Zillow Home Value Index, which measures only the middle price tiers of homes, sets the cost of a typical home in the United States at $344,141. Home values increased by 20% in the twelve months between April 2021 and May 2022. Meanwhile, the median household income in the United States is $67,521 a year. This means the median family can only afford a mortgage of around $250,000 and may find themselves being priced out of owning a home.
One way people are bringing down the cost of purchasing a home is by relocating. Location is the most significant contributor to housing costs, with a typical home in Hawaii, for example, costing more than six times a typical home in West Virginia. Home prices are highest in the Northeast and West, with the highest prices concentrated around the most densely populated areas.
Unsurprisingly, areas with higher housing prices tend to have lower homeownership rates. According to the latest census data, 65.4% of U.S. households own their home. The District of Columbia has the lowest rate of homeownership, at 40.3%. California, New York, and Hawaii are among the states with the highest housing prices and the lowest levels of homeownership. On the other hand, states with relatively low housing costs tend to have higher levels of homeownership. West Virginia, which has the lowest typical house cost, also has the highest homeownership rate, with 79.6% of residents owning their own homes.
Keep reading to compare home prices across states.
The median home in Hawaii is smaller than the national average while costing a great deal more. The median home in Hawaii is 1,300 square feet, approximately 70% of the national median of 1,800 square feet. The median price for a typical home in Hawaii is $848,926, more than twice the national average. Hawaii also has one of the country's lowest homeownership rates, with 59% of its residents owning their homes.
California's homeownership rate is the second-lowest in the nation and the lowest among states, with only 54.2% of residents owning their homes. The state is notorious for its high housing costs, especially in the San Francisco and Los Angeles areas. Perhaps in part due to these high costs, California also has the nation's highest level of homelessness. The typical home in the state costs $760,800 and is 1,625 square feet.
The District of Columbia has the country's third-highest home prices and the lowest homeownership rate. Only 40.3% of residents own their homes. Those looking to buy can expect to pay $701,895 for a typical 1,440-square-foot home.
A typical home in Washington state is 1,903 square feet and costs $595,723. Only 63.6% of residents own their homes in the state. However, despite the high housing costs, Washington State residents enjoy one of the country's best qualities of living.
Colorado's homes are among the nation's largest, with the average home measuring 2,126 square feet. At $236 per square foot, the typical home costs $559,838. Colorado's homeownership rate is 67%, higher than the national average, despite the high home costs.
Massachusetts offers one of the nation's highest quality of living and some of its best education. However, the costs of living in the state are high. A typical home in the state costs $559,312, with an average size of 1,744 square feet. Homeownership is among the lowest in the country, with 60% of residents owning their homes.
Utah has the largest homes in the nation, with an average house measuring 2,305, nearly 50% more than the national average. Prices are also high, with the typical home costing $544,868. However, homeownership rates are higher than the national average, with 70.3% of residents owning their homes.
Oregon's homeownership rate, at 64.3%, is slightly lower than the national average. Home sizes are also slightly below average, with a typical unit measuring 1,780 square feet. The typical home costs $502,215.
Idaho has seen a recent housing boom due to its growth. In fact, Idaho has the nation's second-highest level of population growth. Partially due to the increase in demand, home prices are high. The typical home in Idaho costs $466,435 and measures 1,932 square feet. However, homeownership is also high, with 70.4% of residents owning their homes.
West Virginia boasts the country's lowest housing costs and its highest rates of homeownership. The typical home is 1,714 square feet and costs $129,103. Nearly 80% of residents own their homes. However, the state also consistently ranks among the worst states to live.
Mississippi home prices offer a considerable discount. The typical 1,879-square-foot home has a price tag of $157,828. The homeownership rate is also among the highest in the nation, at 74.8%. However, Mississippi also has the nation's highest poverty rate, with a fifth of its inhabitants living below the poverty line.
A typical home in Arkansas costs $169,867 and measures 1,792 square feet. Homeownership in the state is slightly higher than the national average, with 66.5% of residents owning their homes.
A typical home in Oklahoma costs $171,057. At 1,746 square feet, the average home in the state costs less than $100 a square foot, meaning those with the budget can afford a larger house for their dollar than they can in most states. However, Oklahoma has high levels of poverty and low levels of quality of life satisfaction. Oklahoma's homeownership rate is 67.3%.
Iowa's typical house costs $183,418 and is 1,550 square feet. Iowa has one of the highest homeownership rates in the country, with 75.6% of its residents owning their homes.