Housing costs run from half a paycheck to barely a fifth across U.S. states |
Housing costs run from half a paycheck to barely a fifth across U.S. states
A mortgage stretches further in some states than others. WalletHub ranked all 50 by housing and energy costs to identify the priciest and cheapest
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Housing is the largest line item in most household budgets, and the gap between what homeowners pay in expensive states and what they pay in affordable ones is wider than people expect. A homeowner in a high-cost state can face monthly payments that exceed the total rent of a comparable household in a cheaper one. Mortgage payments are only part of the equation: home energy costs compound the burden, and both keep climbing faster than wages in the places where prices are highest. The result is a squeeze that reaches well above the bottom of the earnings distribution and affects households at a wide range of income levels.
What makes that burden particularly hard to escape is that earnings alone do not solve it. The states where homeowners spend the largest share of their earnings on housing are not low-income places. Several rank among the top five or top ten states for median household income in the country. High wages attract elevated prices, and in the most costly housing markets, those figures have outrun even strong salaries. The assumption that earning more protects against housing strain breaks down in states where both home prices and energy costs have reached their highest levels.
WalletHub measured mortgage payments and home energy costs across all 50 states and adjusted the combined figure to each state's median household income. The result is a ranking of how much of a typical household paycheck goes to keeping a roof overhead. The states at the top of the list devote close to half of median household income to housing. The states at the bottom spend less than one-fifth. The six states examined here represent both ends of that range.
Most: Hawaii spends half its earnings on shelter and energy
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Hawaii holds both the highest mortgage payments and the steepest energy costs in the U.S., driving its housing burden to 50.02% of median income and ranking first overall. The average Hawaiian homeowner directs roughly half of every dollar earned toward mortgage payments and home energy. A burden at that level leaves an unusually thin margin for every other expense a household carries.
The dual source of that burden sets Hawaii apart. Hawaii has both the most expensive mortgage payments in the country and the highest home energy costs nationwide. No other state holds both records at once. Mortgage costs alone are severe enough to place Hawaii at the top of any housing-affordability comparison, but energy expenses — driven by the state's near-total dependence on imported fuel — add a second layer that compounds the pressure each month. A homeowner managing a large mortgage also faces utility bills that, in most other states, would register as a significant expense on their own.
Hawaii's position is especially notable because it is not a poor state. Hawaii's median household income is $100,389 per year, placing the state among the top five nationally. The income is real and substantial, but the cost of homeownership in Hawaii so far outpaces it that even a top-tier salary cannot prevent housing from consuming half the paycheck.
Iowa homeowners, at the opposite end of the WalletHub ranking, spend about 17% of income on housing. The gap between the two states is roughly 33 percentage points. A Hawaiian homeowner earning the same salary as an Iowa counterpart would still spend about three times as much of those wages on housing, purely as a function of geography.
Hawaii's renters face an even steeper position. On the renters' side of the WalletHub ranking, Hawaii also holds first place, with those costs consuming 62.52%........