With housing costs consuming up to 50% of the median income in some states, the personal-finance company WalletHub today released its report on the States Where People Spend the Most & Least on Housing to highlight where homeownership is least affordable for the average resident.
For this report, WalletHub analyzed mortgage and home energy payments across all 50 states. These costs were then combined and compared with each state’s median household income to determine where people spend the largest share of their income on housing.
| Highest % of Income Spent | Lowest % of Income Spent | |
| 1. Hawaii (50.02%) | 41. Kentucky (20.34%) | |
| 2. California (43.00%) | 42. Mississippi (20.13%) | |
| 3. Massachusetts (33.67%) | 43. Arkansas (19.93%) | |
| 4. Oregon (33.56%) | 44. Indiana (19.70%) | |
| 5. Washington (32.97%) | 45. Illinois (19.70%) | |
| 6. Colorado (32.58%) | 46. Ohio (19.68%) | |
| 7. Nevada (32.36%) | 47. Nebraska (19.34%) | |
| 8. Idaho (30.88%) | 48. Kansas (18.64%) | |
| 9. Montana (30.47%) | 49. West Virginia (18.39%) | |
| 10. New York (30.41%) | 50. Iowa (17.26%) | |
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/
“Homeowners and home buyers have faced whiplash over the past few years, with housing prices soaring and interest rates fluctuating from historic lows back up to the highest rates in more than a decade. In the most expensive state, housing costs can take up around 50% of the median income. In order to manage expensive mortgage payments and other key housing costs, it’s important for homeowners to budget effectively.”
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“People in Hawaii spend the most on housing as a percentage of their income. The average Hawaiian shells out 50% of their income between monthly mortgage payments and home energy costs. For comparison, Iowa residents only spend an average of 17% of their income on housing costs.”
- Chip Lupo, WalletHub Analyst
5 Tips for Saving on Housing
- Get a shorter mortgage: You can save a staggering amount of money on interest just by taking out a 15-year mortgage rather than a 30-year mortgage. Naturally, your monthly payments will be much higher, but if you can afford it, your wallet will thank you in the long run.
- Improve your budgeting skills: Learning how to budget properly is essential for making sure you have enough money to afford your monthly housing bills on top of all your other expenses. If you haven’t bought a house yet but plan to in the future, you should strive to budget money each month toward a down payment, after putting money toward your basic needs and paying down existing debt.
- Make a large down payment: The larger your down payment is, the less interest you’ll pay over the course of your mortgage, and the better interest rates you may receive. Plus, making a down payment of at least 20% of the property’s price will prevent you from having to purchase private mortgage insurance.
- Minimize your use of utilities: Utilities won’t be as big of a cost as your mortgage, but they still add up quickly. Taking shorter showers, lowering your thermostat by a few degrees during the winter, raising it by a few during the summer, turning lights off when they’re not necessary and doing other things to minimize your use of utilities can save you a lot.
- Improve your credit before buying: The better your credit score is, the better your interest rate on a mortgage is likely to be. The best ways to improve your credit score include making on-time payments on your existing debts, keeping your credit utilization low and checking your credit report for errors. You can check your credit score and report for free right here on WalletHub.
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