10 Best and 10 Worst States for Millennials To Buy a Home

Table Of Content

• Hidden gems in the real estate market
• Best state for first-time homebuyers:
• In Less Than a Decade, You Won't Be Able To Afford Homes in These 80 Southern ZIP Codes
• Looking to Buy a Home in a More Affordable State?
• best states for first-time homebuyers plus key factors
• Key Housing Market Indicators Impacting Buyers & Sellers

In 2018, the ratio of the median home value to median household income was 3.10, the 17th-best in our study. The Mountain State offers more than tall, rocky landscapes as it ranks as the best state for homeowners. West Virginia is also No. 1 for having the lowest percentage of households that are housing cost-burdened, with those who pay more than 30% of their income on housing (14.86%).

Hidden gems in the real estate market

The state boasts the 19th-highest overall location opportunity for residents, which includes job growth, population growth (seventh highest), and happiness score (second highest). These figures show that the state has a lot of employment opportunities and a great living environment, enticing people to relocate. The following table ranks the 10 states with the lowest cost of living and also notes the number of first-time buyer programs, median home sale prices and the 2021–2022 price change (in percent) for each.

Best state for first-time homebuyers:

Over the years and through her internship at a real estate developer in the Philippines, Camella, she developed and discovered essential skills for producing high-quality online content. Each category was given an equal weight of 20% based on the importance of each metric to the potential for a positive return on investment (ROI). And here are the bottom five states for first-time homebuyers (No. 1 being worst).

In Less Than a Decade, You Won't Be Able To Afford Homes in These 80 Southern ZIP Codes

Illinois, on the other hand, has the highest foreclosure rate of 0.144%, with one foreclosure for every 694 housing units. Mississippi has the lowest overall cost of living, with a cost of living index of 84.5 versus 100 for the U.S. as a whole. This means that the cost of living in Mississippi overall is 15.5% lower than the cost of living for the national average. Most of the homebuying programs offered by these and other states are similar. They tend to offer lower down payment requirements combined with competitive interest rates and mortgage insurance assistance.

Looking to Buy a Home in a More Affordable State?

After all, it’s right outside Atlanta, another housing market that beat the returns of the S&P 500 over the last half-decade. Median property values are the fourth highest, and available properties are relatively low, which indicates the need for more housing. However, investors need to be mindful of how quickly they can raise the rent since its increase in rental income appreciation is the nineteenth lowest in the country. Despite this, however, homeowners can enjoy the fact that the state ranks extremely well for its low number for foreclosures and low burglary rate.

best states for first-time homebuyers plus key factors

Although the median sale price for single-family homes in April 2023 was $269,500, anyone looking for a condo or co-op can easily find one for around $120,000 or a townhouse for around $150,000. Finding an affordable home that meets a family’s needs in today's housing market takes extra patience and research. Apart from the initial sticker price, other factors, such as taxes and utility costs in a given state, also contribute to the decision to buy. However, if you’re in the market for a home, finding one below half the national average is challenging but not altogether impossible.

Kentucky: Independence

If we’re looking strictly at the cheapest states to buy a home for the first time, the list is different from the overall list of the best states for first-time homebuyers. The table below details the states that offer more than five first-time homebuyer programs (or programs open to first-time homebuyers). On the other end of the spectrum, some states have affordable home prices but still rank poorly in our analysis due to the impact of all 12 of the factors we considered. Nevada’s appeal lies not only in its famous entertainment hub, Las Vegas, but also in its diverse landscapes and outdoor recreational opportunities. The state boasts a sunny climate, breathtaking desert scenery, and access to outdoor activities such as hiking, skiing, and boating.

Thought it has multiple homebuyer programs open to first-time homebuyers, New Jersey suffers from the highest effective property tax rate in the study. New Jersey also has high foreclosure rates, with one foreclosure for every 855 housing units — equal to a foreclosure rate of 0.117%. Idaho has the ninth-highest median home value, which falls just under $450,000. Homeowners will typically pay just over $1,000 in homeowners insurance annually and an effective property tax rate of 0.49% (both of which rank fifth-lowest study-wide).

15 States With The Highest Average Home Prices - Forbes

15 States With The Highest Average Home Prices.

Posted: Mon, 09 Oct 2023 07:00:00 GMT [source]

When you evaluate these statistics, it makes sense why Virginia is one of the best states for rental properties. Due to its high population of renters (34.1%) and low cost of living (12th-lowest), Georgia is ranked as the best state overall to invest in real estate. With a high property appreciation rate year-over-year (Y-o-Y) of 4.70%, there is potential for rising rents and long-term equity growth. To determine which states are best for homeowners, we compared all 50 states across 11 metrics on topics exploring homeowner costs such as taxes, closing costs and homeowners insurance. For a breakdown of our data sources and how we put all the information together to create our final rankings, read the Data and Methodology section below. Frankfort is the capital of Kentucky and its largest cities are Louisville and Lexington.

The earning potential of a particular area is influenced by a wide range of factors, including home values, vacancy rates, cost of living, tax burdens, available inventories, and overall rental opportunities. Prospective homeowners should know that New Hampshire falls behind other states when it comes to property taxes. Census Bureau data from 2018 shows that it has the third-highest median annual property taxes paid by residents, at about $5,600. As a result, the effective property tax rate is 2.09%, the fourth-highest in our study.

Utah could be a great place to call home whether you opt to go with West Valley City and its solid housing market or not given the long-term prospects for its economy. Gretna is the best market to consider when you’re a homebuyer looking in Louisiana, but the state has a lot to offer potential buyers, especially if you haven’t owned a home before. Despite not reaching California levels, Colorado is likewise a state where home values are high and getting higher. Westminster could be a great spot to start for young homebuyers looking for a respite in a state that is among the worst for millennial homebuyers. The incredible market for buyers in Fairbanks is probably explained by the fact that home prices are projected to decline over the next year. GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.

Maine is the fourth-worst state for investing in real estate due in part to its low resident affordability, ranking 51st collectively. The cost of living index is relatively high (13th-highest), considering the median household income is $64,767 (33rd). Plus, the state lacks opportunities for residents, e.g., the happiness score and job and population growth were low at 25, 40, and 21, respectively. These numbers limit the number of renters willing to live in the Pine Tree State. The Mountain State ranks third among the worst states for owning rental property. This is primarily due to the overall ranking for rent potential, which looks at the percentage of renters at 22.2%, average monthly rent at $732 (both ranked 51st), and vacancy rate at 9.3%, ranked 45th.

Property growth data was taken from Redfin.com, and rental growth data was taken from Rent.com. To evaluate states based on recent potential, we ranked each for average monthly rents from the World Population Review, vacancy rates from the U.S. Census Bureau, and the percentage of renters to homeowners from iPropertyManagement. Rankings were derived from states with the highest rents, lowest vacancy rates, and highest percentage of renters to owners.

Additionally, less than 18% of South Dakota households are housing cost-burdened (13th-best). Home values in the state have increased by 14.38% between late 2021 and 2022, rising to a median $268,094. Kentucky offers a charming blend of Southern hospitality, beautiful countryside, and a rich cultural heritage. Known for its horse racing tradition and bourbon production, the state has a unique charm.

With a real estate tax rate below 1% and a median home value under $200,000, the Show-Me State may be a good option for those with a tighter housing budget. To see what’s available in your price range, check out the homes for sale in Missouri. A lower cost of living and median home value below $175,000 makes Iowa another affordable state. To find your home in the Hawkeye State, search current houses for sale in Iowa. There are many great and affordable places to buy a house and what’s best for each home buyer will depend on their lifestyle, budget and goals. As of August 2023, the state of the housing market is a challenging one for many home buyers – and is expected to continue to be for several reasons.