Highlights
- California, Montana, and New York are among the top expensive states for homebuyers in the U.S., where housing costs consume a significant portion of their income.
- Coastal states tend to have higher housing prices due to limited inventory and higher incomes, leading to record-high prices.
- Housing affordability remains a concern, but there are signs of improvement.
The housing market in the U.S. has seen a significant increase in prices since the pandemic, with home prices soaring and mortgage rates nearly doubling. This surge has pushed the average housing payment to unprecedented levels, with homebuyers now spending close to 40% of their income on housing, according to Redfin data. This has exacerbated the housing crisis, forcing more individuals into a competitive rental market.
As living expenses continue to rise, many people are relocating to more affordable regions within the country. Areas in the Sun Belt, Midwest, and Northeast have witnessed growth, while coastal cities have experienced a slowdown.
In a market where affordability is a top priority, it is essential to identify the most expensive states to buy a house. Whether you are planning a relocation or simply curious about housing costs, this Redfin article provides valuable insights.
Top 10 Most Expensive States to Buy a House
California, Montana, and New York rank as the most expensive states for homeownership in the U.S., where residents spend approximately half of their income on monthly housing expenses. Hawaii and Massachusetts also feature in the top five.
| State | Share of Income for Home Affordability | Median Household Income | Median Sale Price |
| California | 52.4% | $107,551 | $777,566 |
| Montana | 47.7% | $78,675 | $527,848 |
| New York | 47.3% | $93,285 | $553,268 |
| Hawaii | 47.1% | $108,925 | $747,660 |
| Massachusetts | 45.9% | $112,800 | $687,847 |
| New Jersey | 44.9% | $112,362 | $587,128 |
| Rhode Island | 42.9% | $95,262 | $538,315 |
| Washington | 42.5% | $106,486 | $617,990 |
| Oregon | 42.5% | $90,070 | $521,368 |
| Idaho | 41.3% | $84,416 | $498,340 |
Approximately 22 states require residents to allocate at least 35% of their income towards housing costs, while an additional 15 states fall within the 30-35% range. States like Arkansas, Pennsylvania, and Wisconsin are among those with higher housing cost burdens.
Traditionally, experts recommended spending 30% or less of income on housing expenses. However, with rising costs and stretched budgets, the threshold for affordability has shifted to 35%.
States Witnessing Declining Affordability
Alaska and New York are the only two states experiencing deteriorating housing affordability trends.
New York’s affordability challenges stem from increased competition in previously affordable markets, while Alaska faces supply shortages due to complex construction processes and rising material costs.
| State | Share of Income for Home Affordability | Year-over-Year Change (percentage points) |
| Alaska | 32.7% | +0.5 ppts |
| New York | 47.3% | +0.3 ppts |
Overall, housing affordability is improving across the nation as wages outpace housing prices, although economic uncertainties may pose challenges in the near future.
Factors Influencing Expensive Housing Markets
The most expensive states for homeownership typically align with costly urban centers. Coastal and mountainous regions, characterized by limited space and high demand, tend to have pricier housing markets due to supply-demand imbalances and geographical constraints.
Montana has seen a surge in housing prices as affluent individuals from coastal areas seek refuge in mountain towns, leading to affordability challenges for local residents. Conversely, Midwestern states like Iowa, Indiana, and Oklahoma offer more affordable housing options due to surplus supply.
>> Read: The Most Expensive Cities in the U.S. in 2026
Understanding Rising Housing Costs
The U.S. has been grappling with a housing supply shortage since the Great Recession, exacerbated by the recent surge in homebuying activity. This imbalance between supply and demand has propelled housing prices to unprecedented levels.
Despite a softening demand, sellers are cautious due to market uncertainties, contributing to sustained high prices even amidst a slower market pace.
While challenges persist, experts anticipate a gradual return to normalcy in the housing market, with affordability slowly improving over the coming years.
>> Read: Why Are Houses So Expensive?
Methodology
This analysis builds on a June 2026 Redfin study of housing affordability by examining all 50 U.S. states. The study focused on the percentage of income required by a median-earning resident to afford a typical home purchase each month. States surpassing the 35% threshold of median monthly income allocation towards housing costs were deemed unaffordable. Data sources included MLS, U.S. Census, and Atlanta Fed data.