Buying a first home is one of the most important investments you will ever make. Beyond choosing the perfect home, you’ll also need to decide on a home market that is within your budget.
While home prices by state are not always directly comparable, there is still value in learning the most affordable and most expensive places to buy a home.
The Entry Level Residence Market is Growing
For the last five years, the starter home market has been stagnating. Slow growth has resulted in less choice for first time buyers. This is now beginning to change. In the first quarter of this year, inventory of starter grew by 3.5%. This is the best growth seen in six years.
The Most Affordable Starter Home Markets in the United States
Four of the top five most affordable states report median prices below $60,000.
- West Virginia is the most affordable state by a wide margin. The median starter price is $42,300.
- The rest of the range is more tightly packed. Oklahoma has a median starter price of $50,700.
- Arkansas also has an affordable market, with a median starter price of $56,800.
- Michigan has a starter median price of $58,000.
- Kansas is the fifth most affordable state for a starter home, with a median price of $61,200.
The Most Expensive Starter Home Markets in the United States
At the top end, starter home prices are more than five times higher than West Virginia.
- Washington State has a median starter price of $243,700.
- Colorado jumps ahead with a median price of $247,600.
- California remains one of the most expensive places to buy a home, with a median price of $305,300.
- Hawaii jumps significantly with a median starter price of $331,500.
- Washington D.C., with its lack of real estate, is unsurprisingly at the top with a median starter price of $335,700.
Consider More Than Price When You Invest in
Price is a critical factor when buying your first home. Job opportunities, median wages, entertainment, and schooling also need to be taken in to account.
Mortgage applications have increased in recent months and interest rates are still very reasonable for first time buyers. The economic expansion looks set to continue, even though it’s slowing. Residence prices should maintain in the short term.
If you’re looking for the ideal time to buy, 2019 is as good as any year in recent memory.
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