These are the cheapest countries to buy a house

These are the cheapest countries to buy a house

While the main principle of making money with real estate is always location, shopping for a basic home is a lot easier if one lives in certain states and cities.

Even setting aside the differences in salaries between some popular coastal cities and the rest of the country, many pockets of the country have house prices that are more or less commensurate with what an average income would need to afford an average home.

According to a recent study from mortgage lender, the average home in Iowa costs $147,800 or an estimated $702 per month in mortgage payments. A person who brings in only a median salary will need to cash out 10.6% of the mortgage, within the well-established “28% rule” which states that total mortgage, tax, and insurance payments should not exceed 28% of an individual’s income.

Look at the Midwest and the South, not Hawaii

“The largest housing markets in Iowa include Des Moines, Iowa City, and Cedar Rapids,” the study authors wrote.

Several other Midwest states have also made it into the top 10 least expensive countries to buy a home. Indiana, Ohio, Nebraska, and Kansas all earn less than 12% of the average salary for making mortgage payments on a mid-priced home.

The only two states outside the Midwest to make the top 10 are Mississippi and West Virginia, while other southern states such as Alabama, Kentucky and Missouri take the top 15.

As the 15th cheapest state to buy a home, South Dakota will take 12.62% of an individual’s monthly income to pay for a median-priced home.

Compare that with Hawaii, established by as the most expensive state to buy a home in the country. With a median home price of $615,300 and an estimated monthly mortgage payment of $2,923.36, it would take local residents 35.15% of their salary to pay for a typical home.

And those numbers are still more rosy than on certain islands β€” amid an outpouring of out-of-state residents with big city stipends coming in during the pandemic, many locals who haven’t secured a home yet are finding their prices exorbitant from the places they’ve lived in for generations.

Living vs. investment

Notorious for its years-long housing affordability crisis, California came in second with 32% or a median home price of $505,000 and an estimated monthly mortgage payment of $2,399.32.

Due to skyrocketing prices in the region, western states such as Oregon, Washington and Colorado made it to the top five countries in the study for unaffordability.

Since a lack of demand is the main reason some of the states on this list are affordable, lower-cost places may be more beneficial to those who already live there rather than the drive to move there to investβ€”for the latter, it’s best to keep track. Defined popular pockets.

While it would require a much higher investment than the state average, Youngstown, Ohio saw real estate prices rise 77% between 2021 and 2022.

“The affordability of a home can vary greatly from place to place, particularly with the unique taxes, utilities, and other expenses associated with any given city,” the study authors wrote. “[…] While one area may have more expensive home prices, there are also salary differences to offset these price points.”

See the full list of most and least expensive countries for home users here.

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