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Income Levels Needed to Purchase a Home in Each State

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Today, I'd like to share the latest analysis on the income levels required to purchase a home across different U.S. states. This analysis provides a clear picture of the current housing market conditions in the U.S. Illinois, in particular, has emerged as one of the most affordable states for buying a home.

 

Currently, the median household income in Illinois is $80,306, and the income required to purchase a median-priced home is about 7% higher than this figure. According to the latest data from Realtor.com®, this indicates that the income burden for homeownership in Illinois is relatively lower compared to many other states.

 

On the other hand, Montana has the largest income gap when it comes to purchasing a home. To buy a home there, a household would need more than 151% of the median household income. This is due to Montana's median home price being $604,500, which requires an annual income of $178,017. However, the median household income in Montana is only around $70,800.

 

On a national level, the average income needed to buy a home is $118,530, which is 52% higher than the national median household income of approximately $77,700. This calculation is based on the median home list price in December 2024 and a 30-year fixed mortgage rate of 6.93%. It includes property taxes, insurance costs, and assumes a 10% down payment while ensuring the mortgage payment doesn’t exceed 30% of the household’s monthly income.

 

This analysis offers valuable insight into how much income potential homebuyers need to be able to afford a home. For Illinois residents, this is particularly positive news, as it means homeownership is relatively more attainable compared to other states. I hope this information is helpful for those currently searching for a home. I look forward to bringing you more useful updates in the future. Thank you!

 



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