Most of us have heard the golden rule of housing: Don’t spend more than 30% of your income on housing. Known as the 30% rule, it’s a benchmark financial experts often cite to help households avoid becoming “house poor” — meaning you have little savings left after paying monthly housing costs.
Unfortunately, for many Americans, that standard works better in theory than in practice. Realtor.com data shows that in most states, households earning the median income cannot comfortably afford a median-priced home without stretching their budgets too thin.
It’s a reality shaped by the same persistent strains on housing affordability: high mortgage rates, high home prices, and economic headwinds such as inflation, which continue to drive up the cost of everyday necessities like food and gas.
The good news is that Realtor.com has identified 11 states where homebuyers can still afford homes without overburdening themselves financially. The majority are located in the Midwest, and surprisingly, not a single state in the South — a region often associated with lower living costs — made the cut.
“Midwestern states tend to have stronger labor markets, which keep incomes high relative to home values,” said Joel Berner, a senior economist at Realtor.com. They also “have less of a lower tail of household incomes than the Southern states, so more Midwesterners end up able to afford homes.”
Here are the 11 states where a household earning the median income can afford a typical home without spending more than 30% of its income, according to Realtor.com.
11. Minnesota
- Share of median income needed to afford a median-priced home: 29.9%
- Median household income: $88,572
- Median home-list price: $388,212
10. Maryland
- Share of median income needed to afford a median-priced home: 29.8%
- Median household income: $99,340
- Median home-list price: $434,302
9. Missouri
- Share of median income needed to afford a median-priced home: 29.5%
- Median household income: $69,725
- Median home-list price: $301,158
8. West Virginia
- Share of median income needed to afford a median-priced home: 29.4%
- Median household income: $60,185
- Median home-list price: $259,523
7. Pennsylvania
- Share of median income needed to afford a median-priced home: 28.5%
- Median household income: $74,855
- Median home-list price: $312,487
6. Michigan
- Share of median income needed to afford a median-priced home: 28.3%
- Median household income: $70,131
- Median home-list price: $290,329
5. Indiana
- Share of median income needed to afford a median-priced home: 28.3%
- Median household income: $71,469
- Median home-list price: $295,810
4. Kansas
- Share of median income needed to afford a median-priced home: 27%
- Median household income: $74,030
- Median home-list price: $292,632
3. Ohio
- Share of median income needed to afford a median-priced home: 27%
- Median household income: $70,196
- Median home-list price: $277,348
2. Illinois
- Share of median income needed to afford a median-priced home: 26%
- Median household income: $80,648
- Median home-list price: $307,674
1. Iowa
- Share of median income needed to afford a median-priced home: 25.4%
- Median household income: $75,991
- Median home-list price: $282,886
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