How much it costs to buy or rent in each state

Which states have the cheapest rents and mortgage payments? We looked at the latest Census data to find out where the most and least affordable places to buy or rent are. See what housing costs look like in your state. 

Cost of living comparison: Renting vs. buying by state

In the U.S., the median rent is $1,406 and the median monthly mortgage payment is $1,904. Here's what those numbers look like on the state level. 

Median rent and mortgage costs in each state

Which state has the most affordable rents?

According to the data, the top five cheapest states to rent in are:

1. West Virginia: $850
2. Mississippi: $898
3. North Dakota: $916
4. South Dakota: $921
5. Kentucky: $929

In each of these states, you can rent for less than $1,000 a month.

By contrast, the top five most expensive places to rent in are:

1. California: $1,992
2. Hawaii: $1,940
3. Washington, D.C: $1,904
4. Colorado: $1,771
5. Massachusetts: $1,757

Obviously, this will vary depending on exactly where you're located within a state and what your city's rental market looks like.

In New York City, for example, median rent is $1,748, making it more expensive than most states, even though New York state's median rent is only $1,561.

Median rent costs as a percentage of income

It's important to keep in mind that income also varies from state to state. So even if a state has a low median rent, that doesn't tell us a ton about how affordable it actually is for the people living and working there.

For true affordability, we need to know how much households in the state typically earn, and what portion of their earnings are spent on rent. 

When we look at median rents this way, we can see that the states where rent is most affordable shift. The top five states where households spend the smallest share of their incomes on rent include:

1. North Dakota: 14%
2. South Dakota: 15%
3. Iowa: 16%
4. Wyoming: 17%
5. Nebraska: 17%

The top five states where households spend the largest share of their incomes on rent include: 

1. Florida: 28%
2. Nevada: 25%
3. California: 25%
4. Arizona: 25%
5. Hawaii: 24%

Which state has the lowest mortgage payments?

The top five states with the lowest mortgage payments are:

1. West Virginia: $1,208
2. Arkansas: $1,315
3. Mississippi: $1,321
4. Indiana: $1,359
5. Alabama: $1,372

And the top five places with the highest mortgage payments are: 

1. Washington, D.C: $3,001
2. California: $2,844
3. Hawaii: $2,739
4. New Jersey: $2,676
5. Massachusetts: $2,629

Median mortgage costs as a percentage of income

Similar to how we did with rent costs, to understand how affordable a state's median mortgage payment is, we also need to look at how much homeowners are spending on their mortgages relative to their incomes. 

The states where homeowners are spending the smallest share of their incomes on a mortgage are: 

1. Indiana: 23%
2. Iowa: 25%
3. Utah: 25%
4. Missouri: 26%
5. Delaware: 26%

And the places where they spend the largest share of their incomes on a mortgage are: 

1. California: 36%
2. New York: 36%
3. Hawaii: 34%
4. Washington, D.C: 33%
5. Texas: 33%

How to decide if you should rent or buy a house

In terms of the amount you spend each month, it's generally cheaper to rent than to own a house. However, buying and owning a house can ultimately be the better financial choice in many situations. If you're weighing renting vs. buying, here are some things to think about:

Your local housing market

Rents and home prices vary a lot from city to city, and in some cases, it could be more affordable to buy rather than rent.

For example, if you need to live in the heart of your city's downtown, it may be cheaper to rent. But if you're looking in an area where home prices are relatively low, it could be worth it to buy. 

You also want to consider how quickly rents rise in your area. Rents can go up every time you renew your lease, while a payment on a fixed-rate mortgage will remain the same (aside from changes to your homeowners insurance and property tax costs). 

Additionally, mortgage rates vary by state, so depending on where you're located, you could get a better deal on a mortgage compared to borrowers in other states. (And to ensure you're getting the best deal, don't forget to shop around for the best mortgage lenders.)

Upfront and ongoing costs

While homeownership can come with a lot of financial benefits, like growing your equity over time, it also comes with a lot of upfront and ongoing costs.

When you buy a house, you'll need to pay a down payment and closing costs. 

Down payments can be as low as 3% (or 0%, if you qualify for a zero-down mortgage like a VA loan), while closing costs can end up being between 2% and 5% of the loan amount. 

You'll also pay property taxes and homeowners insurance premiums, which can increase every year. If either of these costs are particularly high where you live, renting may be cheaper.

As a homeowner, you'll also be responsible for all home maintenance and any repairs needed. As a renter, your landlord is responsible for this, helping you avoid having to dip into your emergency fund to pay for unexpected home-related costs.

Your needs and lifestyle

Some people prefer renting because it's more flexible and requires less upkeep. If you need to move, it's way easier to do so as a renter. If something breaks, your landlord can send a repair person over. As a homeowner, you'll need to figure that out on your own. 

But if you want more privacy or a larger space, homeownership might be the better choice. You'll also have more freedom to customize your space and complete home renovations.

Your financial plan

Home values typically go up over time, meaning you'll gain wealth as a homeowner that you won't as a renter. For many homeowners, their houses are an important part of their financial portfolio.

As the money you have in your home grows, you can leverage it with a home equity loan or HELOC to pay for home repairs or upgrades or to consolidate debt. You can also use your equity to fund a down payment on your next home, boosting your buying power. 

Of course, buying a home isn't always a good investment. If you buy a fixer upper or your home ends up having major issues, you could end up putting more money into homeownership than you get out of it.

Methodology: How we determined rent and mortgage costs

Our median rent, household income, and mortgage payment data comes from the Census Bureau's 2023 American Community Survey 1-year estimates. Median monthly income was calculated by taking the ACS's median household income in 2023 dollars for each state and dividing it by 12. 

We used median income and housing cost data, rather than averages. The median is the middle value in a set of data, and it can be useful to look at when you have a dataset that is skewed or has outliers. 

Molly Grace

Mortgage Reporter

Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership. ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them. Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach. ExpertiseMolly is an expert in the following topics:

• Mortgages and mortgage lenders
• Home equity
• The housing market
• The economy and the forces that impact mortgage rates
• Budgeting and saving
• Credit
• Insurance
• Retirement savings

EducationMolly earned a bachelor's degree in journalism from Indiana University. She is based in Michigan and has a dog and two cats. 

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