West VA Offers Most Affordable Homes For First-Time Buyers

First-time homebuyers in West Virginia get the best affordability in the country, needing just a $31,653 income to afford a starter home, according to a new analysis from Realtor.com.

On the opposite end of the spectrum, Hawaiian first-timers must make $167,199 to afford the cheapest homes on the market.

The cost of buying a home has risen all over the country since the pandemic ushered in a buying boom.  Louisiana has seen typical monthly payments rise 77% since 2019, and that’s the smallest increase in the country. Buyers must make $46,752 for the home to be considered affordable, up from $26,468 in 2019.

New Hampshire, meanwhile, has seen monthly payments on starter homes surge 164% in the same time period. An “affordable” starter home in this state, assuming a 10% down payment, would cost $2,600 a month on a $103,985 income.

“Though home price growth has contributed significantly to declining affordability, mortgage rate growth has exacerbated the issue,” Realtor.com senior economic research analyst Hannah Jones noted. 

“While starter home prices climbed 53.7% over the last five years, payments more than doubled due to mortgage rates increasing from roughly 4% to almost 7%.

Realtor.com defined a starter home as a home priced at the 25th percentile price for an area in 2024, and the price assumes a 7% mortgage rate and a 10% down payment.

Financial guru Dave Ramsey recently recommended that everyone, including first-time buyers, see past 7% rates and focus on the overall financial benefit of buying a home when competition is low.

“House prices will start going up as interest rates continue to drop. Lots of folks haven’t been able to afford a house because of high interest rates, so they’ve been sitting and waiting,” he wrote.

“As rates keep getting lower, more and more of those people will start buying homes—and sellers will be able to raise their prices because of that increase in demand. If you wait to buy and home prices increase, you’re stuck with the higher prices.”