If you want to find an inexpensive home, look to Iowa, Oklahoma, or Ohio.
Those states have the lowest median prices for single-family homes, per a Bankrate analysis of Redfin's monthly housing data from late February. Meanwhile, Hawaii, DC, and California have the highest median home prices. One of the biggest factors contributing to the steep costs is a lack of supply, said Daryl Fairweather, the chief economist at Redfin.
"These places have high-paying job markets, strong economies without sufficient housing," Fairweather said. "Supply is not able to meet demand in these areas because of regulations like single-family zoning red tape around construction and general neighborhood opposition to development of dense housing."
In February, the median existing home price was $398,400, per the National Association of Realtors, and the 20th consecutive month of year-over-year increases.
Regional trends in the cost of housing
Redfin's monthly data shows that the median price of a home in Hawaii is $975,000 and $230,600 in Iowa.
Regionally, the coastal areas of New England and California are more pricey than the South and Midwest. But Fairweather cautioned that may not be the case for long.
"People are leaving expensive areas like the coast and going to places that are cheaper," said Fairweather, adding that demand and housing prices are increasing in the Midwest and South. "They're going to places that have supported new construction, but also places that have growing job markets."
Business Insider has reported on the people who left expensive states like New York and California for cheaper and less crowded destinations.
For example, US Census data showed that more people left California than moved into the Golden State between 2022 and 2023 — and Texas has absorbed the most Californians.
However, housing affordability can remain an obstacle even if people relocate.
Americans need to earn $116,633 annually to afford the median-priced home for sale, per a Redfin report published on Thursday. In 2021, that figure was $63,925.
"Homebuyers have gotten much older," said Fairweather. The median age of a first-time homebuyer is now 38 years old, up from the 1980s when people were in their late 20s, indicating that people are having to save longer before making a home purchase.
Are you a first-time homebuyer trying to purchase a home amid economic uncertainty? Contact this reporter at jdeng@bjinnox.com.
