U.S. Markets closed

The Best States for Millennials to Buy a Home

Grace Lin

The financial picture for millennials today is a mixed bag — unemployment is low across the country, but wage growth hasn’t picked up. Young workers also have to contend with a staggering $1.5 trillion in student loan debt. On top of that, millennials are reaching the age where they’re thinking about buying a home — or, at least that’s what their parents did a generation ago.

In order to help millennials find affordable housing, GOBankingRates evaluated median home prices across America relative to the national median income for people ages 25 to 34, which is $60,932. Assuming millennials put away 20 percent of their salary each month to save for a down payment on a home, GOBankingRates determined the amount of time it would take to afford a 20 percent down payment and calculated the estimated monthly mortgage payment in every state based on a 30-year, fixed-rate mortgage. Keep reading to see the best and worst places for millennial homebuyers.

 

50. Hawaii

  • Median list price: $615,000
  • Estimated time to save for a down payment: 8.4 years
  • Monthly mortgage payment: $3,256

Millennials in the least affordable state earn $6,076.25 per month, which means their mortgage payments eat up more than half of their earnings. Everything is pricier in the Aloha State — in fact, Hawaii is the most expensive state to live in by a wide margin.

49. California

  • Median list price: $539,000
  • Estimated time to save for a down payment: 8 years
  • Monthly mortgage payment: $2,862

A 20 percent down payment for an average home in California is in the six figures: $107,800, to be exact. In the most expensive ZIP codes in California, home prices are even higher.

48. Colorado

  • Median list price: $419,000
  • Estimated time to save for a down payment: 6.2 years
  • Monthly mortgage payment: $2,231

Millennials in Colorado can save up enough for a 20 percent down payment nearly two years sooner compared to their counterparts in California. If you’re thinking about buying a home in the Centennial State, note that Denver has one of the hottest housing markets.

47. Massachusetts

  • Median list price: $447,087
  • Estimated time to save for a down payment: 5.6 years
  • Monthly mortgage payment: $2,385

Aspiring millennial homeowners need to put away $1,337.72 in their savings every month to chip away at the $89,417 down payment for a home in Massachusetts.

46. Oregon

  • Median list price: $375,500
  • Estimated time to save for a down payment: 6.4 years
  • Monthly mortgage payment: $2,014

Portland, Ore., is one of the cities where cost of living will soar the most in 2018. However, it’s unclear if household incomes will grow to match — the average millennial in Oregon earns $58,738 annually.

45. Washington

  • Median list price: $395,000
  • Estimated time to save for a down payment: 5.8 years
  • Monthly mortgage payment: $2,006

Millennials in Washington have to squirrel away $1,141.35 per month to save up for a 20 percent down payment of $79,000. However, those numbers might change in the near future: Seattle, in particular, is one of the top 20 cities where home prices are skyrocketing.

44. New York

  • Median list price: $375,000
  • Estimated time to save for a down payment: 5.5 years
  • Monthly mortgage payment: $2,011

Unsurprisingly, New York has one of the highest costs of living in the U.S. The average millennial worker in the Empire State earns $67,678 annually or $5,639.83 per month.

43. Montana

  • Median list price: $320,000
  • Estimated time to save for a down payment: 5.8 years
  • Monthly mortgage payment: $1,726.00

To save up for a $64,000 down payment in just under six years, millennials in Montana need to put away $919.95 of their $4,599.75 monthly paycheck.

42. Nevada

  • Median list price: $314,994
  • Estimated time to save for a down payment: 5.7 years
  • Monthly mortgage payment: $1,700

As one of the states where it takes the longest for millennials to buy homes, Nevada has a median list price that requires a 20 percent down payment of $62,999. Aspiring homeowners need to fork over $918.85 of their $4,594.25 monthly paycheck to save up.

41. Utah

  • Median list price: $354,250
  • Estimated time to save for a down payment: 5.4 years
  • Monthly mortgage payment: $1,806

Despite its $70,850 down payment requirement for the average home, Utah has a lot of other things going for it, including a low unemployment rate.

40. Idaho

  • Median list price: $299,900
  • Estimated time to save for a down payment: 5.7 years
  • Monthly mortgage payment: $1,622

Idaho is the first state in this ranking where the median list price dips below $300,000. Millennials need to save only $59,980 to afford a 20 percent down payment for a home.

39. Florida

  • Median list price: $290,990
  • Estimated time to save for a down payment: 5.6 years
  • Monthly mortgage payment: $1,570

Even if they aren’t daunted by the $58,198 down payment for an average home, millennials looking to buy property in Florida might want to think twice — it’s one of the states with the biggest real estate bubbles.

38. Rhode Island

  • Median list price: $309,900
  • Estimated time to save for a down payment: 5 years
  • Monthly mortgage payment: $1,674

Millennial earners in the Ocean State typically rake in $62,259 annually. Before shopping around for a new home, it’s best to find out the salary needed to afford the average home in Rhode Island.

37. Arizona

  • Median list price: $284,900
  • Estimated time to save for a down payment: 5.1 years
  • Monthly mortgage payment: $1,544.00

If you’re weighing the costs of buying versus renting in Arizona, keep in mind that a 20 percent down payment on a home equals $56,980, and the average millennial earns $55,493 annually in the Grand Canyon State.

36. Connecticut

  • Median list price: $324,900
  • Estimated time to save for a down payment: 4.3 years
  • Monthly mortgage payment: $1,751

Millennials in the Constitution State earn a monthly income of $6,230.83. Even if you feel confident about affording a down payment, make sure you find out how much you really earn in this state.

35. New Jersey

  • Median list price: $334,000
  • Estimated time to save for a down payment: 4.2 years
  • Monthly mortgage payment: $1,799

New Jersey housing prices might not seem that affordable, but buying a home is still cheaper than renting in this state. Millennials should aim to put away 20 percent of their salary — $1,323.85 — to save up for a down payment.

34. North Carolina

  • Median list price: $259,900
  • Estimated time to save for a down payment: 5 years
  • Monthly mortgage payment: $1,414

North Carolina residents ages 25 to 34 earn an annual income of $51,764, which is almost equal to the down payment for an average home: $51,980.

33. Maryland

  • Median list price: $324,900
  • Estimated time to save for a down payment: 4.1 years
  • Monthly mortgage payment: $1,751

Based on the median list price, a 20 percent down payment would amount to $64,980 in Maryland. Unfortunately, Baltimore is one of the top five cities in danger of a housing crisis, according to another GOBankingRates study, so millennials might want to steer clear.

32. Texas

  • Median list price: $279,500
  • Estimated time to save for a down payment: 4.8 years
  • Monthly mortgage payment: $1,439

Average millennials need to save $970.17 of their $4,850.83 monthly paycheck to afford a down payment in Texas within five years.

31. Virginia

  • Median list price: $310,000
  • Estimated time to save for a down payment: 4.4 years
  • Monthly mortgage payment: $1,598

For forward-thinking millennials, Virginia stands among the top 20 states where it’s easiest to save $1 million for retirement. Based on the median home list price, a 20 percent down payment in Virginia amounts to an even $62,000.

30. Georgia

  • Median list price: $254,900
  • Estimated time to save for a down payment: 4.8 years
  • Monthly mortgage payment: $1,388

Millennials in Georgia earn an average of $53,084 every year, or $4,423.67 per month. However, for Georgians burdened by student loan debt, it might be difficult to save up enough for a down payment.

29. South Carolina

  • Median list price: $246,485
  • Estimated time to save for a down payment: 4.9 years
  • Monthly mortgage payment: $1,345

The average annual income for millennials in South Carolina is $50,671, or $4,222.58 per month. Luckily, South Carolina has at least one city where you can afford to live off less than $50,000.

28. Delaware

  • Median list price: $285,995
  • Estimated time to save for a down payment: 4.4 years
  • Monthly mortgage payment: $1,550

Aspiring millennial homeowners will be pleased to find out that Delaware has one of the most affordable home insurance costs. A down payment of $57,199 is necessary based on the median home list price.

27. Tennessee

  • Median list price: $242,000
  • Estimated time to save for a down payment: 4.8 years
  • Monthly mortgage payment: $1,322

In 2022, Tennessee will become the eighth state to have no income tax, which is welcome news for millennials earning an average of $50,837 — or $4,236.42 per month — in the Volunteer State.

26. New Hampshire

  • Median list price: $297,900
  • Estimated time to save for a down payment: 4 years
  • Monthly mortgage payment: $1,611

Millennials looking to buy a home and start a family might want to consider New Hampshire — it’s one of the best states for families to live a richer life. People ages 25 to 34 earn $75,233 annually, which is approximately $15,000 more than the down payment for a home.

25. New Mexico

  • Median list price: $226,000
  • Estimated time to save for a down payment: 4.8 years
  • Monthly mortgage payment: $1,239

You don’t need an extremely high salary to afford a home in New Mexico — millennials need to save just $792.78 per month to make the $45,200 down payment in under five years.

24. Vermont

  • Median list price: $269,000
  • Estimated time to save for a down payment: 4.2 years
  • Monthly mortgage payment: $1,392

More than half of Vermont’s population has less than $1,000 saved, according to a separate GOBankingRates study, which means millennials might need to kick their saving habits into high gear to afford the $53,800 down payment for an average home.

23. Alaska

  • Median list price: $289,000
  • Estimated time to save for a down payment: 3.8 years
  • Monthly mortgage payment: $1,565

Millennials can purchase a home in the Last Frontier within four years if they save $1,264.30 of their earnings every month. However, women might want to think twice before planting roots in Alaska — it’s one of the nine states with the biggest pay gaps.

22. Maine

  • Median list price: $239,900
  • Estimated time to save for a down payment: 4.2 years
  • Monthly mortgage payment: $1,311

In Maine, millennial annual earnings beat the state average at $56,873. Workers need to save $947.88 of their monthly salary to afford a down payment of $47,980 based on the median home list price.

21. Minnesota

  • Median list price: $265,000
  • Estimated time to save for a down payment: 3.7 years
  • Monthly mortgage payment: $1,441

Millennials should think carefully before buying a home and committing to the $53,000 down payment with their partners in the North Star State.

20. Louisiana

  • Median list price: $214,000
  • Estimated time to save for a down payment: 4.2 years
  • Monthly mortgage payment: $1,176

Millennials earning $51,402 annually need to set aside $856.70 of their monthly income to afford a down payment in a little over four years. But, for people willing to put in the time and effort, Louisiana is one of the 10 best states for house flipping.

19. South Dakota

  • Median list price: $225,800
  • Estimated time to save for a down payment: 3.9 years
  • Monthly mortgage payment: $1,238

Millennial entrepreneurs should know that South Dakota was the best state in the country to start a business in 2017. People ages 25 to 34 earn a median annual salary of $58,311.

18. Alabama

  • Median list price: $202,500
  • Estimated time to save for a down payment: 4.1 years
  • Monthly mortgage payment: $1,117

It takes slightly over four years to save for a 20 percent down payment on a typical Alabama home using a millennial’s median salary. Luckily for frugal residents, Alabama is in the top five states that spend the least on groceries.

17. Wyoming

  • Median list price: $250,000
  • Estimated time to save for a down payment: 3.7 years
  • Monthly mortgage payment: $1,294

People ages 25 to 34 earn an average monthly paycheck of $5,639.67 in Wyoming.

16. Illinois

  • Median list price: $234,900
  • Estimated time to save for a down payment: 3.7 years
  • Monthly mortgage payment: $1,285

Illinois boasts some of the highest-paid teachers in America, so people in the education field might want to consider settling down there and buying a house. The average millennial takes home a median annual salary of $64,227 in Illinois.

15. Mississippi

  • Median list price: $180,000
  • Estimated time to save for a down payment: 4 years
  • Monthly mortgage payment: $1,000

Millennials need to put away $743.48 of their $3,717.42 monthly paycheck to afford the 20 percent down payment on an average Mississippi home.

14. North Dakota

  • Median list price: $230,000
  • Estimated time to save for a down payment: 3.3 years
  • Monthly mortgage payment: $1,259

North Dakota millennials earn a median annual salary of $69,045, but more of their paychecks go toward taxes compared to other states — residents of the Peace Garden State pay higher-than-average taxes.

13. Nebraska

  • Median list price: $207,950
  • Estimated time to save for a down payment: 3.5 years
  • Monthly mortgage payment: $1,145

Millennials in Nebraska need to save just under $1,000 of their average monthly paycheck to afford a down payment within 3 1/2 years, based on the state’s median list price.

 

12. Pennsylvania

  • Median list price: $212,000
  • Estimated time to save for a down payment: 3.4 years
  • Monthly mortgage payment: $1,166

To save up for a $42,400 down payment in approximately 3 1/2 years, Pennsylvania millennials need to set aside $1,038.20 of their monthly paycheck.

 

11. Wisconsin

  • Median list price: $209,900
  • Estimated time to save for a down payment: 3.4 years
  • Monthly mortgage payment: $1,097

Property in Wisconsin might seem quite affordable to millennials, especially because their median paycheck of $5,098.83 per month exceeds the salary needed to afford the average home in the state.

10. Kentucky

  • Median list price: $184,900
  • Estimated time to save for a down payment: 3.6 years
  • Monthly mortgage payment: $1,025

Kentucky kicks off the top 10 most affordable states for millennials to buy homes. People ages 25 to 34 need to devote $859.73 of their $4,298.67 monthly paycheck on average to save up for a down payment.

9. Arkansas

  • Median list price: $175,000
  • Estimated time to save for a down payment: 3.7 years
  • Monthly mortgage payment: $974

Millennials earn $47,339 per year on average in Arkansas. Note that the Valley View School District in Jonesboro is the richest school district in Arkansas, which might be of interest to millennial parents looking to buy a home.

8. Oklahoma

  • Median list price: $182,633
  • Estimated time to save for a down payment: 3.5 years
  • Monthly mortgage payment: $1,014

The average millennial in Oklahoma earns an annual salary of $52,500, or $4,375 per month.

7. Michigan

  • Median list price: $185,000
  • Estimated time to save for a down payment: 3.4 years
  • Monthly mortgage payment: $1,026

In Michigan, millennials need to set aside $918.18 of their $4,590.92 monthly income on average to afford a 20 percent down payment.

 

6. Kansas

  • Median list price: $189,000
  • Estimated time to save for a down payment: 3.2 years
  • Monthly mortgage payment: $1,047

Based on a 20 percent down payment of $37,800, millennials would have to put away $976.73 every month on average to save up enough for a home.

 

5. Indiana

  • Median list price: $180,000
  • Estimated time to save for a down payment: 3.3 years
  • Monthly mortgage payment: $1,000

People ages 25 to 34 earn a median monthly income of $4,579, so they need to save $915.80 of their paycheck to afford a down payment in Indiana.

 

4. Missouri

  • Median list price: $180,000
  • Estimated time to save for a down payment: 3.3 years
  • Monthly mortgage payment: $1,000

If you’re a millennial debating between renting or buying a home, Kansas City is one of the best big cities for renters. However, a 20 percent down payment for a house is still relatively affordable at $36,000.

3. Ohio

  • Median list price: $169,900
  • Estimated time to save for a down payment: 3 years
  • Monthly mortgage payment: $948

If they commit to setting aside $931.57 per month, millennials can afford a $33,980 down payment on their median annual salary of $55,894 in just three years.

2. Iowa

  • Median list price: $179,000
  • Estimated time to save for a down payment: 2.9 years
  • Monthly mortgage payment: $995

Iowa — the second-most affordable state for millennials to buy a home — is the only state in this ranking where it takes less than three years to save up for a down payment.

1. West Virginia

  • Median list price: $159,000
  • Estimated time to save for a down payment: 3.2 years
  • Monthly mortgage payment: $847

With a 20 percent down payment of $31,800, it would take just over three years to save enough on the median millennial income of $50,130 a year. Monthly mortgage payments in West Virginia are also the lowest on this list.

The Best Places to Buy a Home Have This in Common

The study found that the 10 most affordable states for millennial homebuyers are all clustered in the Midwest and the South. Meanwhile, eight of the 10 least affordable states for millennials to buy homes are located in the West, excluding Massachusetts and New York. The strategy for millennials is clear: Find your dream home in the Midwest or South, and stake your claim while housing prices are still low.

More on Real Estate

Andrew DePietro contributed to the reporting for this article.

Methodology: To determine millennial home affordability, GOBankingRates evaluated median home prices for each state in conjunction with the national median income for people ages 25 to 34, which is $60,932. Assuming millennials put away 20 percent of their salary each month to save for a down payment on a home, GOBankingRates calculated the amount of time it would take to afford a 20 percent down payment. The estimated monthly mortgage payment in every state was based on a 30-year, fixed-rate mortgage. Those two numbers — the mortgage payment amount and time to save for a down payment — were scored to develop the final state affordability ranking.

This article originally appeared on GOBankingRates.com: The Best States for Millennials to Buy a Home