In these 22 states, you need a six-figure income to afford a typical home, analysis finds

(CNN) — Buying an affordable home in the United States has gotten a lot harder for many people since 2020.

A new analysis from Bankrate.com finds that in 22 states and Washington, DC, buyers need a six-figure household income to comfortably afford a typical median-priced home.

That’s a lot more than in January 2020, when Bankrate found buyers needed a six-figure income in just six states and the District of Columbia.

“Homes have become less affordable because home price appreciation has so far outpaced wage growth,” said Jeff Ostrowski, a Bankrate analyst. “Why have home prices gone up so quickly? Blame supply and demand.”

There has been less housing supply to meet buyer demand both because there is less homebuilding, he said, and because of the “lock-in effect” of higher mortgage rates and home prices. These factors make existing homeowners reluctant to sell because it will cost them more to buy a new house.

What “affordable” means

Of course, how one defines “affordability” can vary widely and is very particular to buyers’ financial circumstance – not just their income but their savings and whether they’re carrying a lot of other debt or own other properties. And it also matters whether someone has enough money left over after buying a home to afford its upkeep on top of all their other bills.

The Bankrate.com analysis made some prudent assumptions, assessing affordability strictly from the perspective of the mortgage payments (which include principal, interest, property taxes and property insurance). But it didn’t factor in closing costs, which vary widely based on the lender, the loan type and the location of a home. And it didn’t factor in home maintenance costs and the cost of non-housing items.

Specifically, the analysis assumed buyers make a 20% down payment and take out a 30-year fixed rate mortgage at the 52-week average interest rate. It also assumed their mortgage payments don’t exceed 28% of their annual gross income.

Based on that, Bankrate calculated that in the United States – where the overall median home price is $402,343, according to Redfin – “aspiring homebuyers must earn $110,841 annually to afford a median-priced home.” (A median sales price in an area is the price at which half of the homes for sale are priced higher and half are priced lower.)

Of course, while national averages – or state averages, for that matter – can offer a broad take on trends in housing affordability, they don’t tell you much about the neighborhood you’re looking in, since real estate values are always about “location, location, location.”

Where you need the most – and least – income to snag a median-priced home

People buying on the West Coast and in the Northeast need the highest household incomes to afford a typical home, Bankrate found. The top 5 places are: California (where an income of $197,057 is needed); Hawaii ($185,829); District of Columbia ($167,871); Massachusetts ($162,471); and Washington State ($156,814).

The other states where a six-figure income is needed are: Arizona ($110,271); Colorado ($152,229); Connecticut ($119,614); Florida ($114,771); Idaho ($114,386); Maine ($102,557); Maryland ($108,257); Montana ($131,357); Nevada ($111,557); New Hampshire ($130,329); New Jersey ($152,186); New York ($148,286); Oregon ($129,129); Rhode Island ($132,343); Texas ($100,629); Utah ($133,886); Vermont ($114,471); and Virginia ($106,971).

By contrast, states in the South and Midwest require the lowest levels of income to snag a median-priced home: Mississippi ($63,043); Ohio ($64,071); Arkansas ($64,714); Indiana ($65,143); and Kentucky ($65,186).

Where income needs have gone up the most (and least) since 2020

Six-figure incomes aside, sometimes the measure of how affordability changes over time can be seen in how much more income you need to buy the average home today than yesterday.

Compared to 2020, income needs jumped the most in Montana (up 77.7%); Utah (up 70.3%); Tennessee (up 70.1%), South Carolina (up 67.3%) and Arizona (up 65.3%).

“The Sun Belt has become less affordable amid the influx of new homebuyers in those areas in the past few years,” Ostrowski said. “That trend has been going on for decades, and it has intensified.”

But, he added, there are still some deals to be had in the Rust Belt and the Midwest. For instance, Bankrate found that the income needed to buy a median-priced home rose the least in North Dakota (up 9.2%); Illinois (up 27.2%); and Kansas (up 29.3%).

The complete Bankrate analysis can be found here.