Buying your first home is traditionally considered a life milestone. But acquiring the keys to that starter home, whatever its size, has become harder to do.
Millennials especially are finding it tough to save up for a first home. Homeownership rates are lowest among households under age 35, with 36.4% owning homes as of the second quarter of this year, according to U.S. Census Bureau statistics. The homeownership rate across all ages is 64.1%.
Of course, your starter home could be a mobile home or a small condo, an urban bungalow or a suburban rambler. Much depends on home prices, how much money buyers have and the state or city. Your money goes a lot further in Deep South states than in an urban area of a state like California or New York.
Business Insider teamed up with Zillow to determine the median cost of a starter home in each state and Washington, D.C. Zillow, a real-estate marketplace, examined properties with values in the lower one-third of all homes.
We ranked the states based on the median cost of starter homes. Our list starts with the places that have the highest starter-home median price and ends with those that have the lowest.
51. Washington, D.C.
Median starter home value: $335,700
The nation’s capital has the highest median starter-home value. Even if you have enough money, good luck finding a home to spend it on. As a broker told The Washington Post in March, housing in the capital is “flying off the market.”
The broker says that, for around $300,000, first-time buyers in the District of Columbia are probably looking at a condo or co-op, and that the smarter buy is an older, unimproved unit near the Metro railway, not the kind of brand-new residence many buyers dream about.
Median starter home value: $331,500
Oh, Hawaii, we know you’re expensive, but your tropical temperatures and beautiful beaches sure seem worth it.
And, check this out: As MoneyTalksNews reports, the Aloha State offers the lowest real-estate property tax burden in the nation, with a 0.27% effective real estate tax rate.
Median starter home value: $305,300
California is like a bunch of different states all in one: San Francisco, Los Angeles, San Diego, Sacramento, Santa Barbara — each area has its own housing woes and pros.
Look at Los Angeles, as an example. One real estate agent tells the Los Angeles Times that first-time buyers may experience sticker shock when they realize that they may have to settle for a two-bedroom home that requires some TLC because a turnkey three-bedroom is out of their price range.
Median starter home value: $247,600
Breathtaking Colorado remains a popular destination for skiers, snowboarders and mountain-climbers. This may be a good time to load up your winter gear and head to the Rockies, especially if you want to live in, Denver, the state’s capital city.
According to Denver Westword, the city is shifting to a buyer’s market, with more homes coming on the market, boosting the supply. The market still is in transition, however.
The news source issues two warnings:
- Not many homes are priced below $300,000 (search $350,000 for more choice).
- The homes you do find may need some work.
Median starter home value: $243,700
Scenic Washington state has great variety, from the rolling hills of the Palouse, in Eastern Washington to the urban excitement of pricey, popular Seattle, in the western part of the state.
The Evergreen State has no income tax. But according to Money Talks News, residents still may face high property and sales taxes. A WalletHub study shows that the total tax burden eats up 14.59% of the earnings of low-income residents, 11.26% of middle-income residents’ earnings and 7.32% of higher-income Washingtonians’ earnings.
Median starter home value: $243,300
Looking for a starter home in Massachusetts? You’d better look outside the Boston area, since competition among first-time homebuyers is about to heat up there, according to Boston.com, which cites data from Zillow.
The median age of first-time buyers in Greater Boston is 34, the story says, and that age group is expected to grow by nearly 20% over the next decade.
Need a tiny bit of good news? Boston-area broker associate David Bates tells Boston.com that more “modestly priced condos” are available in Boston proper than a year ago. (Bad news? He’s defining “modestly priced” as below $600,000.)
Median starter home value: $243,200
Utah tops the nation for building new housing, the Salt Lake Tribune reported in May. But temper this with some not-so-great news: That’s not enough. More available housing in the Beehive State will help lower prices for both homebuyers and renters, area economists say.
U.S. Census Bureau estimates report that Utah’s housing units grew 2.2% from 2017 to 2018, compared with the national rate of 0.8%, the Tribune reports.
Median starter home value: $227,100
Here’s a tiny bit of good news for those looking to buy in Oregon — or at least in popular Portland. According to the Oregonian newspaper, in early 2019, year-over-year median home prices in the metro area dropped for the first time since 2012.
There was more light at the end of the tunnel for buyers: In January, more than 4,700 homes were for sale, a 3.3-month supply. That’s still slim by historic standards, but the newspaper reports it’s the biggest inventory in Portland since 2015.
43. Rhode Island
Median starter home value: $205,000
Rhode Island may be the nation’s smallest state, but its housing prices aren’t small. Nor are the tax bills in Providence, the capital city.
A recent article published by The Public’s Radio (formerly known as Rhode Island Public Radio) reveals that some homeowners are coping with sticker shock thanks to new higher property taxes.
State law requires cities and towns to reassess properties every nine years and, since property values are climbing, so, too, are taxes.
Median starter home value: $200,500
Nevada is a state for gamblers and those who don’t mind taking big risks — at least in the casinos of Reno and Las Vegas.
But here’s a word you don’t always associate with Vegas: “stable.”
Median starter home value: $199,300
Alaska, with its breathtaking scenery and reputation as America’s Last Frontier, has great appeal.
But in 2018, a magnitude 7.1 earthquake shook nerves in its largest city, Anchorage.
Hundreds of homes suffered significant damage.
Though it’s tough to know if slower sales in recent months are directly related to the quake, it’s definitely complicated the process for buyers and sellers, says the Anchorage Daily News.
40. New Hampshire
Median starter home value: $174,300
New Hampshire homebuyers have a generational dilemma. According to the Concord Monitor, the Granite State has one of the oldest median population ages of any state in the union. Many of those older residents are trying to downsize.
That puts them in competition with young families looking for starter homes, the paper reports. Older buyers are likely to have equity in their current homes, so they can outbid the younger generation.
39. New Jersey
Median starter home value: $174,200
New Jersey is a popular state for those who want to be near the amenities and attractions of New York City but with a little more breathing room for kids and for a yard.
When WalletHub ranked the states for family friendliness, the Garden State scored high.
New Jersey was No. 2 for affordability and for child care and education. It ranked well for health and safety, too.
Median starter home value: $171,800
Idaho home prices are setting records. The Idaho Statesman reports that real estate in the Gem State may be overvalued.
According to a recent analysis cited in the report, Idaho real estate is overvalued by 20% to 24%, tying with Nevada for the most-overvalued real estate in the U.S.
Small comfort perhaps, but Idaho isn’t alone. Fitch Ratings, a credit rating service, says home prices in about a fifth of U.S. metropolitan areas are more than 10% overvalued.
Median starter home value: $166,200
Do the plentiful sunshine and desert landscape of Phoenix, Arizona’s capital city, appeal to you? Better buy soon. The sunny Southwestern state isn’t getting any cheaper.
According to the Arizona Republic newspaper, Phoenix has long been considered “the West’s most affordable city,” but that title may be in jeopardy.
Incomes in the metro Phoenix area have not kept pace with rising home prices. The median home cost has shot up more than 44% since 2013, and the median household income in the region has gone up just 12%.
Median starter home value: $155,300
You may have to hunt hard for a home in Maryland’s most populous city, Baltimore.
Prices in the area hit an all-time high in June, with all homes selling for a median of $300,000, the Baltimore Business Journal reports.
Even if you’ve got the cash, the road to homeownership isn’t easy. The housing inventory in the area remains below the five-year average, the publication reports.
Median starter home value: $155,300
Are the mountains and prairies of Wyoming calling your name? If so, you should know that it’s a seller’s market in the state capital, Cheyenne, according to the Cowboy State Daily.
There are not a lot of homes to choose from. The news site reports just 250 active listings in the Cheyenne market in late June, compared with 750 a decade ago.
Median starter home value: $151,300
Looking for a home in Connecticut? The market is softening, so this might be your moment.
According to a June report in The Hartford Courant newspaper, single-family home sales have fallen for 11 straight months. The median home sale price also has dropped, to $280,000.
Good news for sellers of condos: Connecticut condo prices are at an eight-year high, the Courant reports.
Median starter home value: $149,000
Montana’s housing situation confuses even the experts.
A February 2019 report in the Missoula Current says that more than two-thirds of Montana counties (with available data) have seen home prices rise at least 70%.
Those higher prices, experts tell the publication, should encourage the building of more homes. But, for unknown reasons, that doesn’t seem to be happening.
Median starter home value: $146,400
If you’re looking to live in Delaware, here’s a piece of good news: The First State was recently rated the best state for low-income taxpayers, says Money Talks News, citing a WalletHub study.
For low-income taxpayers (those with incomes of $25,000 or less) property tax takes up just 1.63% of their income. The total tax burden for low-income residents is 5.24% of income.
Make more than $25,000? More good news. Delaware ranks No. 2 for the impact of taxes on those at the middle-income level.
Median starter home value: $138,700
Looking for a family-friendly state? If you don’t mind cold winters, the Land of 10,000 Lakes might be your dream come true.
Minnesota is the best state for raising a family, Money Talks News says, citing a recent WalletHub study that ranks the states on what they offer families.
Minnesota has the highest median family salary (adjusted for cost of living). It was ranked high in the study for health and safety and was in the top 10 for education and child care.
Median starter home value: $135,800
Looking to buy in Maine? Single-family home sales cooled off early this summer compared with last year, the Maine Association of Realtors says, and home values climbed more than 5% over the same time last year.
Many wannabe homeowners want to sign on the dotted line and are hoping prices will become more affordable, according to Maine Public Radio.
Median starter home value: $133,900
Amazon.com announced last year that it had chosen Northern Virginia as one of two locations for its second headquarters, in addition to its Seattle base.
That news left some low- and moderate-income residents of the area uneasy, since the housing market already was strained, Curbed.com reports.
Since the announcement, home prices in Arlington County have risen 17%, and residents worry life in the already expensive region near the nation’s capital will get pricier.
Median starter home value: $133,300
If theme-park haven Orlando appeals to you, this may be the time to punch your E Ticket.
The Orlando Sentinel newspaper reports that central Florida housing prices fell this year for the first time since 2012.
That ended an 86-month streak of rising home prices in which the value of a median home rose 94%, to $239,200, according to Zillow.
Median starter home value: $127,800
Does Vermont intrigue you? Well, you could effectively get paid to move to the Green Mountain State.
As Money Talks News reports, Vermont’s 2019 Remote Worker Grant Program beckons workers with full-time jobs working from home who meet certain requirements.
Qualifying workers could receive a grant of up to $5,000.
26. New Mexico
Median starter home value: $126,500
New Mexico, the Land of Enchantment in the American Southwest, may not be the most family-friendly state in the union.
A recent study ranking the states to determine the best locations to raise children ranked New Mexico dead last, Money Talks News reports. The state was marked down because of its high rate of violent crime, high divorce rate and low median family salary.
25. New York
Median starter home value: $120,800
Ah, New York. As the old Frank Sinatra song goes, “If I can make it there, I’ll make it anywhere.”
That might be the theme song for those struggling to buy a starter home in the state’s largest city.
Curbed New York reports that starter homes are “a thing of the past” in NYC, thanks in part to the fact that New Yorkers buy later in life and stay put once they buy a place.
The site says almost half of first-time buyers in the Big Apple make a down payment of less than 20%, which puts them below the level at which buyers are typically required to get mortgage insurance.”
24. South Dakota
Median starter home value: $119,100
If you are searching for a home in Rapid City, in the foothills of this state’s western Black Hills region, you might have a tougher time than you hoped.
According to U.S. News & World Report, the housing market is “white-hot,” with buyers snapping up homes they may not have seen in person, only in a video walk-through with a real estate agent.
23. North Dakota
Median starter home value: $113,100
Thinking of a move to North Dakota? You may find homebuying easier than in some other regions, because North Dakota has the fastest-growing combined personal income of any state.
The state’s oil boom can take credit for a 4.45% combined 2018 personal income rate of growth, according to an analysis by the Pew Charitable Trusts of data from the U.S. Commerce Department. Pew looked at which states saw the most dramatic income growth, and North Dakota came out on top, Money Talks News reports.
Median starter home value: $106,400
If you are thinking of buying your starter home in the Lone Star State, consider the Dallas-Fort Worth area. Money Talks News reports that metro recently topped a list of best U.S. cities for a real estate investment.
The annual Emerging Trends in Real Estate study uses information from experts, market focus groups and a survey by the Urban Land Institute to produce the list. Dallas and metro neighbor Fort Worth did well thanks in part to high activity among business startups and to a young workforce.
Median starter home value: $106,200
Wisconsin’s capital city of Madison was recently dubbed a “new mecca for millennials” by the National Association of Realtors, according to CNBC.
The study ranked the top millennial housing markets, examining the number of young residents living in or moving to an area.
Madison’s millennial appeal was credited in part to its burgeoning tech sector and the growing numbers of out-of-state students who move there to attend the University of Wisconsin.
Median starter home value: $100,100
Georgia’s metro Atlanta area is bustling, but if you want to buy a house there, do it soon. Prices continue to climb faster than in most large metro areas, the Atlanta Journal-Constitution reports.
The paper cites the S&P CoreLogic Case-Shiller Indices national survey, which notes that the city’s average home price has gone up by 4.7% in the past year, the fourth-largest gain among the nation’s 20 largest metro areas.
19. North Carolina
Median starter home value: $90,300
North Carolina’s Research Triangle is a region defined by three large cities that are home to major educational institutions: Duke University in Durham, the University of North Carolina in Chapel Hill and North Carolina State University in Raleigh.
If the Triangle is looking sharp to you, be aware that the real estate market there started the summer on an upswing, according to the Raleigh-based News & Observer. The area housing market has been much stronger than the national housing market and benefited from a recent drop in mortgage interest rates.
Realtors say that an under-supply of starter homes in the Triangle has driven strong sales of those properties.
Median starter home value: $88,700
You might not have expected that Omaha would top a hot home-sales list, but … surprise!
According to the Omaha World-Herald, homes for sale in Nebraska’s largest city sat on the market for the shortest number of days of any major American market in January. On average, homes were bought in just 32 days, compared with 41 or longer for other cities.
Median starter home value: $83,400
Meet me in St. Louis, as the old song says. According to the St. Louis Business Journal, that Missouri city is offering up the kind of houses buyers are looking for.
There’s a relatively narrow gap between the median price of St. Louis homes and the amount shoppers want to pay. The report notes that buyers in the St. Louis region want houses with a median price of $234,900, and the actual median listing price is even less, coming in at $224,467.
Median starter home value: $80,300
Is Chicago your kind of town? That’s true for many baby boomers, the Chicago Tribune says, and they’re not ready to pass their homes on just yet. The newspaper recently reported that many members of that giant generation aren’t selling their homes and downsizing, which means their homes aren’t available for millennial buyers.
And to top it off, Chicago real estate agents tell the paper that boomers often are renovating their homes in ways that won’t appeal to younger families. Creating extra-wide hallways, for example, might accommodate wheelchair and walker users, but young families don’t need such changes.
Median starter home value: $79,600
Philadelphia freedom? The song title may ring true if you’re doing well financially, but not if you’re among Philly’s poorer residents.
The Philadelphia Tribune reports that housing costs in the city are rising faster for those with low or moderate incomes than for those who earn more. New research shows that Philly households earning less than the national median income saw their housing costs grow by 8% between 2007 and 2018, while those costs didn’t rise at all for households earning above the national median.
Median starter home value: $75,400
The Indianapolis Star reports that builders in the area “simply aren’t building enough new affordable homes to keep up with future demand.”
The publication reports on a housing study that shows construction would have to increase by 21% over the next 20 years to meet housing demands in Central Indiana.
Median starter home value: $75,400
Looking for a starter home is one thing, but even renters in the state capital of Des Moines are having a tough time finding an affordable home.
The Des Moines Register reports that extremely low-income families — such as a family of four making under $25,100 — cannot afford 60% of Central Iowa rental units. A recent study by the National Low Income Housing Coalition found that 85.15% of such families spend more than half of their income on rent.
Median starter home value: $74,100
Dreaming of your old Kentucky home? According to the Northern Kentucky Tribune, 2018 was the second-biggest year ever for home sales in the Bluegrass State and set records in most local markets.
The publication reports that 52,305 housing units were sold in 2018, just 750 short of the record set in 2017.
Median starter home value: $73,100
Pack your guitars and head to Nashville. The musical city is a buyer’s market, the Tennessean reported earlier this year. A Zillow economist told the paper that home prices in Nashville “were growing at an unsustainably high rate,” and things have since cooled.
In fact, in March, Nashville saw 11,510 unsold homes sitting on the market, which the publication reports is the largest number since January 2015.
10. South Carolina
Median starter home value: $72,500
Looking for a home in historic Charleston? The Post and Courier newspaper calls the South Carolina port city’s real-estate market “strong, stable and consistent.”
In fact, as of late July, the city’s housing market is just a percent or two off compared with the record-setting year of 2018, with the median home price having risen about 4.5%. That’s good news for sellers, but buyers may have to jump fast when they find an appealing home. Inventory is low, and affordability issues persist, the paper reports.
Median starter home value: $70,700
The Mississippi real estate market was good for both buyers and sellers in 2018, Mississippi Business Journal reports.
Like many states, Mississippi finds that smaller homes are especially in demand, but there’s a little more breathing room for first-time buyers here. As the article notes, the Magnolia State’s home prices are cheaper than those in some other areas. (California, we’re looking at you.)
Median starter home value: $68,400
If you’re looking to buy in Central Ohio, better be ready to jump when you see the home that you want. According to Columbus Business First, which cites data from finance website SmartAsset, that area of the state is home to three of the five easiest places to sell a home in the Buckeye State.
Columbus suburb Reynoldsburg topped the list, with homes there spending an average of 29.6 days on the market.
Median starter home value: $64,300
Strike up the brass band in New Orleans — if you’re a home seller, that is. According to NOLA.com, home prices were on the rise in the region when 2018 ended, with the median price of a home at $206,000, up 3.3% from one year prior.
Median starter home value: $61,200
Rural Kansas may not be at the top of everyone’s list of prime areas to buy a home, but maybe it should be — especially if you need help paying off student loan debt.
The Kansas Department of Commerce offers the Rural Opportunity Zone program. Applicants, who must have a college degree, may find themselves rewarded with up to $15,000 in student loan repayments over five years, or state income tax waivers for up to five years.
Median starter home value: $58,000
Detroit, the famed Motor City, has had its ups and downs. But its Challenge Detroit program gives future business and community leaders an opportunity to spend a year in the city.
As we explain in “7 States, Counties and Towns That Will Pay You to Move There,” the hope is that program participants will contribute to the city’s improvement and opt to stay there:
“Program fellows will work for a year at a host company, live in or near the city and join community projects to strengthen bonds with their temporary home. The annual challenge aims at revitalizing Detroit, which has long suffered the ravages of urban blight spurred by the massive loss of automotive jobs in recent decades.”
Median starter home value: $56,800
Minorities are struggling to buy homes in Northwest Arkansas, the Arkansas Democrat-Gazette reports.
According to U.S. Census Bureau data for 2013-2017, 86% of owner-occupied homes in the region belonged to non-Hispanic white people, with Hispanics accounting for nearly 9% of homeowners and African-Americans accounting for less than 1% of homeowners.
Experts tell the paper that a lack of entry-level housing is just one of the circumstances contributing to lagging homeownership among minorities in the area.
Median starter home value: $52,800
Real estate in Alabama was all over the map in 2018. According to news site AL.com, Mobile saw the biggest one-year home price gains in the entire U.S., but the state capital, Montgomery, saw sellers taking the nation’s biggest losses.
Montgomery also saw the nation’s highest percentage of all-cash home purchases last year, the site reports.
Median starter home value: $50,700
Oklahoma City may want to invest in some avocado-toast restaurants, or other stereotypically millennial hangouts (probably not golf courses), since members of that generation are moving in greater numbers to cities like this state capital, where home prices are lower.
According to CNBC, millennial-aged homebuyers in OKC can afford to buy 30% of the homes listed for sale there. In San Diego, by comparison, millennials can barely afford 2% of homes on the market there.
1. West Virginia
Median starter home value: $42,300
Wow, West Virginia! The Mountain State deserves its No.1 spot on this list. See that $42,300 number? You could buy seven starter homes at that price for the amount of money one median starter home would cost you in Washington, D.C., the priciest area on this list — and you’d still have a lot of cash left over.
It’s not a secret to those in the know. Back in February, Realtor.com named Huntington, West Virginia, as one of its top 10 metro areas in which to buy your first home.
What’s your take on the cost of starter homes in your state? Sound off by commenting below or over on Money Talks News’ Facebook page.
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