The Average Price of a Starter Home Across the U S.

Table of Content

• Mortgage payments by city
• Typical home price in Connecticut: $383,222 (89% of typical U.S. price)
• Is this data reasonable?
• The entry price for first home buyers is rising
• What is the Average Price of a Starter Home in the U.S?

The homeownership rate percentage analyzes the number of American homes that are occupied by the owner divided by the total number of all occupied households. On the other hand, the most affordable starter homes were located in Oklahoma, Michigan, and Kansas. The national average of a standard starter home price range is $230,100.

Many or all of the products here are from our partners that pay us a commission. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Your entry-level home also could come through alternative methods, such as ashort sale. This type of home purchase occurs when a seller's mortgage lender agrees to accept a mortgage payoff amount that is lower than the remaining balance on the seller's existing loan.

Mortgage payments by city

While home prices are below the typical U.S. price, the median income is also 25% lower than the U.S. median. In Minnesota, homeowners normally have a little breathing room in their budgets. The typical home price is below the U.S. price, and incomes beat the country as a whole by 16%. You need to look at all your credit bills and get a copy of your credit report.

The median worker in Tennessee pulls in $40,856 in annual earnings. The median home value of all houses in South Dakota is $188,600. The median worker in South Dakota pulls in $41,125 in annual earnings.

Typical home price in Connecticut: $383,222 (89% of typical U.S. price)

The cost of living index is 87.5, and the median household income is $50,500. The median home in Hawaii is smaller than the national average while costing a great deal more. The median home in Hawaii is 1,300 square feet, approximately 70% of the national median of 1,800 square feet.

All Certificates of Deposit are deposited in Lead Bank, Member FDIC, Sunrise Banks, N.A., Member FDIC or SouthState Bank, N.A., Member FDIC. Oregon's homeownership rate, at 64.3%, is slightly lower than the national average. Home sizes are also slightly below average, with a typical unit measuring 1,780 square feet. Colorado's homes are among the nation's largest, with the average home measuring 2,126 square feet.

Is this data reasonable?

The median worker in California pulls in $50,560 in annual earnings. The median worker in Arkansas pulls in $39,024 in annual earnings. The median worker in Arizona pulls in $52,060 in annual earnings. The median worker in Alaska pulls in $52,060 in annual earnings.

That cost includes not only the monthly mortgage payment, but also other necessary costs like homeowners insurance, HOA fees, and property taxes. The median income (24% more than the national median) hasn't been able to match home prices in Utah. That makes home ownership difficult for many residents because of high average mortgage payments. Tennessee’s lower-than-average housing costs isn’t enough to compensate for incomes 19% under the national median. Buying a home in New Hampshire is doable, but many residents will find it challenging. Although the median income beats the U.S. median by 31%, the typical home price still leads to expensive mortgage payments.

Are among the most highly valued in the U.S., yet despite its median income being 31% above the national median, the average mortgage payment still far exceeds the 28% rule. West Virginia has the cheapest home prices according to Zillow at 40% of the typical U.S. price. Mortgage payments there take up 16.5% of the state's median income on average, the lowest rate in the nation.

Now, let's take a deeper dive into what average house prices are like across the country. Mississippi has the country’s lowest cost of living index, rated at just 83, and the lowest median household income at just under $45,000. Surprisingly, homes in the state only rank fifth for least expensive at about $115 per square foot which means average home prices fall in the $140,000 to $145,000 range. Alabama hosts the U.S Space and Rocket Center, but the housing market is down to Earth. Average per-square-foot pricing is $114, while average home prices are $170,000.

The primary thing to look for in a starter home is affordability. You don't want your starter home to overextend your finances and make it harder to move into a better home later in life. Beyond that, you should ensure that you will enjoy the location and the living space.

Just over half (55%) of buyers under 29 rented before purchasing their home, and 51% of those aged rented too. Pre-approval is a process in which a bank evaluates your financial health and lets you know how much you can borrow for a home purchase. The bank makes its determination based on your annual income, current debts, etc. Being cheaper also means that the average first home price will be lower, or at an entry-level price range. The price is usually not going to get any lower than the entry-level point, but there will always be pressure to increase the price point.

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The figure covers all types of housing from bachelor apartments to detached homes. At $156 per square foot, the state’s average home price of $208,000 ranks it the 14th cheapest place to buy a house. From late 2018 to the end of 2020, mortgage interest rates were on a decline.

This means the median family can only afford a mortgage of around $250,000 and may find themselves being priced out of owning a home. A little farther west and south of West Virginia is Arkansas, and the state has similar home pricing statistics. At $101 per square foot of real estate, average home prices hover just below $150,000. Coupled with the state’s low property taxes of .61%, it ranks as having the second-lowest average house costs. Arkansas has a cost of living index of just under 90 and median household incomes that average $50,540. Analysis of CoreLogic data reinforces that mortgage affordability is a very real issue, particularly in the larger cities and particularly with houses.

But what is the exact makeup of the typical first-time homebuyer? The following is a breakdown of the average demographics for first-time homebuyers in the U.S. The average credit score for a first-time homebuyer is 725, repeat buyers have an average score of 770.