10 States Where Homeownership Pays Off the Best

homeowners
mangostock / Shutterstock.com

Homeownership isn’t always all it’s cracked up to be. In fact, depending on where you live, you might not be able to afford a home.

If owning a home is too expensive, you might build more wealth by renting and then investing the difference.

But there are some states where homeownership pays off. SmartAsset took a look at data like average home price per square foot, appreciation, foreclosure rates and property tax rates to determine the states in which homeownership is most likely to pay off.

The financial analysis website gave each state a final score based on that data and then used the scores to rank the states. Following are the highest-ranked states, listed from lower- to higher-scoring.

10. Indiana

Indianapolis
f11photo / Shutterstock.com

Final score: 68.87 out of 100

Average home price per square foot: $95

June median home value: $145,300

Indiana might be a good place to buy, with homes that are somewhat affordable. Indianapolis features some of the most affordable homes of major cities in the country, as we reported earlier this year in “How Much You Need to Earn to Buy a House in 20 Major U.S. Cities.”

In fact, 62% of renters in Central Indiana, which includes the greater Indianapolis area, want to become homeowners, The Indianapolis Star reports. But there are also concerns about a housing shortage since the Central Indiana region is forecast to gain more than 270,000 jobs over the next two decades — and home building might not keep up.

9. Wisconsin

SpeedKingz / Shutterstock.com

Final score: 69.21 out of 100

Average home price per square foot: $136

June median home value: $188,900

Wisconsin home sales have lagged this year compared with 2018, Wisconsin Public Radio reports. But buying a home in the Badger State can still be a good value.

While price pressure due to a declining home inventory has been a concern, a recent increase in new listings could bring some of the prices down.

8. Minnesota

Minneapolis, Minnesota residential area
719production / Shutterstock.com

Final score: 71.52 out of 100

Average home price per square foot: $183

June median home value: $238,100

In order to keep up with demand, Minnesota would need to build an estimated 10,000 new homes per year, the MinnPost reports. Home prices have been rising as a result of demand outpacing supply, so it’s no surprise that this state could be a place where buying now could pay off later.

Plus, Minnesota offers a strong quality of life. U.S. News & World Report ranks the state No. 3 in the U.S. for both opportunity and natural environment.

6. Michigan (tie)

African American couple opening door to their home.
wavebreakmedia / Shutterstock.com

Final score: 75.83 out of 100

Average home price per square foot: $120

June median home value: $152,600

Even though homes in Detroit are on the expensive side, according to the Detroit Free Press, you might be able to get a good deal elsewhere in the state.

For example, instead of Detroit, if you want an entry-level price on a home, it might be a good idea to look in Madison Heights, Warren, Westland or Livonia, where you can find better deals, the Free Press says.

6. Colorado (tie)

welcomia / Shutterstock.com

Final score: 75.83 out of 100

Average home price per square foot: $246

June median home value: $378,500

Even though Denver is one of the most expensive major markets in the U.S. to buy a home, Colorado landed on this list. It’s one of the more expensive places to purchase, but at the same time, the one-year home value appreciation is 7.82%, according to Smart Asset.

Plus, many people like the quality of life in Colorado, which includes abundant opportunities for fun outdoors.

5. Wyoming

Couple clowning around with moving boxes.
Syda Productions / Shutterstock.com

Final score: 78.48 out of 100

Average home price per square foot: $174

June median home value: $226,200

Wyoming continues to add jobs, and they are in sectors that aren’t the traditional oil and gas jobs that the state has seen in the past, according to Wyoming Public Radio. Construction jobs are driving some of the rebound in Wyoming’s economy, along with rising wages.

If you’re looking for a place to settle, where buying a home can be a good choice, the Equality State might be a good place to look.

4. Montana

Missoula, Montana
Jon Bilous / Shutterstock.com

Final score: 81.13 out of 100

Average home price per square foot: $186

June median home value: $235,300

If you’re considering buying a home in Montana, it might make sense to look outside of Missoula, where housing availability has been declining, according to the Missoulian. New construction is slowing in the western Montana city, adding to the pressure of rising prices.

However, if you’re interested in a home outside the city limits, you are likely to find some good deals that allow you to enjoy Big Sky Country.

3. South Dakota

Dmitry Kalinovsky / Shutterstock.com

Final score: 81.79 out of 100

Average home price per square foot: $166

June median home value: $191,400

If you’re looking for a place with plenty of access to the outdoors and the potential for a return on your housing investment, South Dakota might not be a bad choice.

U.S. News & World Report ranks South Dakota No. 2 among U.S. states for natural environment and No. 3 for fiscal stability.

2. Utah

Saint George, Utah
Steve Cukrov / Shutterstock.com

Final score: 86.75 out of 100

Average home price per square foot: $235

June median home value: $341,800

Utah’s economy is one of the fastest-growing in the United States, according to the Deseret News. Part of the reason for that is the state’s labor force, which skews younger and is fast-growing and well-educated.

On top of that, Utah offers many outdoor opportunities and is home to multiple national parks and recreation areas.

1. Idaho

Couple standing in front of a home
Monkey Business Images / Shutterstock.com

Final score: 100 out of 100

Average home price per square foot: $161

June median home value: $267,600

I live in Idaho, and I once calculated that I could spend about $300 less per month if I bought a home instead of renting.

With Smart Asset’s analysis showing a one-year appreciation of 12.12% and annual property taxes and insurance, on average, under $2,000, it’s no wonder a homeowner’s likely return is high.

Plus, Idaho is a state known for open spaces, plenty of nature and a small-town feel — even in its cities.

Are steep home prices where you live making you consider moving to a more affordable state? Tell us about it in a comment below or at Money Talks News on Facebook.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
How to Avoid Being Surprised by 7 Nasty Expenses
How to Avoid Being Surprised by 7 Nasty Expenses

Major expenses are difficult to predict, but there are ways to make sure you’re protected.

Have You Heard of This Best Place to Retire in 2020?
Have You Heard of This Best Place to Retire in 2020?

The best place to retire in America is one you likely are not familiar with.

10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

Why Is My Pension Killing My Social Security Benefit?
Why Is My Pension Killing My Social Security Benefit?

A reader says the government is penalizing him for having a pension. Is he right?

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Do This With Your Mask Before Thanksgiving Dinner
Do This With Your Mask Before Thanksgiving Dinner

Before you sit down at the year’s biggest feast, make sure to properly care for your mask.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.