The dream of owning a home hasn’t gone away—but in 2025, it’s looking a lot different than it did just a few years ago. 📈 With home prices climbing and mortgage rates staying high, many prospective buyers are asking the same question: Can I still afford to buy a home this year?
In this post, we break down the latest housing market data, looking at which states remain relatively affordable and which ones now require six-figure incomes just to keep up. Let’s dive into what affordability really looks like in 2025. 👇
🏡 National Overview: The Affordability Squeeze
As of early 2025, the U.S. housing market continues to experience significant affordability challenges:
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Median Home Price: The national median home price reached $398,400 in February 2025, marking nearly two years of consecutive price increases. Business Insider
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Mortgage Rates: The average 30-year fixed mortgage rate fluctuated around 6.84% in February 2025, contributing to higher monthly payments for prospective buyers. Bankrate
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Income Requirements: To afford a median-priced home, a household would need an annual income of approximately $116,633 in 2025, nearly double the requirement from 2021. Business Insider+1Industry Intelligence Inc.+1
🌆 State-by-State Breakdown: Where Can You Afford a Home?
Affordability varies significantly across the U.S. Here’s a look at some states with contrasting affordability levels:
🟢 Most Affordable States
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Iowa: Median home price of $227,500, requiring an annual income of about $48,000 to afford monthly payments comfortably. New York Post
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Ohio: Median home price around $231,400, with a recommended annual income of $50,000 for affordability. New York Post
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Oklahoma: Homes priced at a median of $236,700, suitable for households earning approximately $51,000 annually.
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West Virginia: Median home price of $243,100, accessible to those with an annual income near $53,000.
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Michigan: Homes average $248,000, with affordability for households earning around $54,000 per year.
🔴 Least Affordable States
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California: Median home price of $785,200, necessitating an annual income of approximately $160,000 to manage typical housing expenses. New York Post
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Hawaii: Homes priced at a median of $975,000, requiring an annual income near $200,000 for affordability. Business Insider
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Washington D.C.: Median home cost around $700,000, suitable for households earning about $140,000 annually.
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New York: Median home price of $529,900, with an annual income requirement of approximately $110,000. Business Insider
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New Jersey: Homes average $533,800, necessitating an annual income near $110,000 for potential buyers. GOBankingRates
💡 Key Takeaways
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Regional Variations: The Midwest and South generally offer more affordable housing options compared to the Northeast and West Coast.
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Income vs. Price: In high-cost states, even substantial incomes may struggle to cover housing expenses due to elevated property prices.
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Strategic Planning: Prospective buyers should assess local market conditions, consider relocating to more affordable regions, and consult with real estate professionals to navigate the current landscape effectively.
✅ Conclusion
While buying a home in 2025 may feel more out of reach than ever, affordability still exists—just not everywhere. By understanding how your income stacks up against your state’s housing costs, you can make smarter, more strategic decisions about where (and when) to buy. Whether you’re staying local or considering a move to a more budget-friendly state, the key is staying informed and planning ahead.
📝 Sources
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Business Insider – “The states where you need the highest (and lowest) salaries to afford a median-priced home in 2025”
https://www.businessinsider.com/states-most-affordable-expensive-homes-housing-supply-rising-prices-2025-4 -
New York Post – “Hunting for an affordable house? Consider these states”
https://nypost.com/2025/03/19/real-estate/hunting-for-an-affordable-house-consider-these-states -
GoBankingRates – “Experts Predict the States With the Highest Housing Costs in 2025 — Do You Live in One?”
https://www.gobankingrates.com/investing/real-estate/experts-predict-states-highest-housing-costs-2025-do-you-live-in-one -
Bankrate – “2025 Housing Market Outlook: What Homebuyers and Sellers Can Expect”
https://www.bankrate.com/real-estate/housing-market-2025 -
National Association of Realtors (NAR) – Market Trends and Affordability Data
https://www.nar.realtor/research-and-statistics
🤝 Let’s Hear From You!
Have you recently purchased a home? What factors influenced your decision regarding location and affordability? Share your experiences and insights in the comments below. Got questions or want personalized insights? Drop a comment or reach out—we’re here to help you find your way home.
🏡
Partners Realty Group
(865) 789 – 6677
“Your Trusted Partner in Real Estate.”
