30Sep2018

How much do you need to earn to be able to buy a home?

If you’re starting to look for a home in your area, or considering moving out of state, it’s a good idea to know what kind of prices you’re getting yourself into. Each state has a different cost of living which means different housing costs. Take a look at what some of the most and least expensive states are and get a better idea of what you might need to prepare for.

Howmuch.net breaks down costs by each individual state. They did this by taking the average income per household in each state, the average prices of homes, and calculating by the recommended 30% cost of living budget rule. All of the average incomes needed are based on a 30-year mortgage and include a 10% down payment on the loan using the Zillow Mortgage Calculator.

The 5 most affordable states are:

  1. West Virginia: $38,320 for a house worth $149,500
  2. Ohio: $38,400 for a house worth $149,900
  3. Michigan: $40,800 for a house worth $160,000
  4. Arkansas: $41,040 for a house worth $161,000
  5. Missouri: $42,200 for a house worth $165,900

In these states, you can easily find a house from $149,00 up to $165,000

The 5 most expensive states are:

  1. Hawaii: $153,520 for a house worth $610,000
  2. Washington, DC: $138,440 for a house worth $549,000
  3. California: $120,120 for a house worth $499,900
  4. Massachusetts: $101,320 for a house worth $419,900
  5. Colorado: $100,200 for a house worth $415,000

This brings the average home prices for these states between $415,000 and $610,000.

The biggest reason for the much higher cost in some states comes down to availability. Simply put, there aren’t enough homes being built to keep up with demand in these higher cost states. The good news is there are a good amount of states on the eastern half that has lower costs of living, making a great home affordable to the average working American.

If you’re coming up a little short, you can always try to side hustle. Making money on the side is a great alternative and if you have a hobby you enjoy or something you are really good at, it’s even better. For example, let’s say you are a great cook but aren’t using that skill for anything except home meals. Try a small catering business or in-home cooking classes to make a few extra bucks. Are you good with your hands or love being outdoors? There are always homeowners that could use an extra hand around the house getting that list of repairs done that they either can’t do themselves or simply don’t have the time. Maybe landscaping is your thing? Break out that lawnmower and cut some yards with a lawn care side hustle. There is a market for everything and if you have a set of skills, put them to good use to help you afford that new house in your state. You could even try your hand at restoring furniture. Find scrap furniture that is being thrown out, cheap items at thrift stores, garage sale treasures, or old stuff you’ve been thinking about getting rid of. Usually, a good sanding and a touch of paint are enough to make any old piece look brand new again. If you’re struggling to launch your side hustle, check out our other blogs!

Ready to find the perfect house but don’t quite have the cash you need? A LendingPoint loan may be able to help!

Even if your credit score is lower than you would like it to be, you do have personal loan options. A personal loan can even help improve your credit score. By taking out one of our personal loans. You can make affordable monthly payments and build your credit story by making on-time payments each month. As you continue to make your payments on time, you build your credibility and your credit history. Apply today!

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