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States where people spend most of their paycheck on housing

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    States where people spend most of their paycheck on housing

    While receiving a paycheck is amongst the most euphoric experiences in the lives of workers, the excitement can quickly dwindle away when one realizes how much of that check has to be spent on necessities. The average American spends more than $7,000 a year on food, $9,000 on transportation, $11,000 combined in insurance and health care, and $10,000 on taxes. This does not leave a lot of wiggle room for the more fun things in life, especially when considering these costs do not even address the immense financial burden of putting a roof over one’s head. While the average American spends nearly $19,000 annually on housing, people living in various places around the country budget their earnings differently, especially when it comes to investing in real estate.

    Using survey data from Microsoft News, Stacker compiled a list of the states where people spend the greatest percentage of their paychecks on housing. All 50 states are ordered according to the percentage of respondents who spend 50% or more of their paychecks toward their home, with the state spending the highest percentage ranked first. Read on to see how each state stacks up against the rest of the nation.

    Microsoft News Poll results are analyzed to represent the U.S. adult population or specific sub-demographics. Microsoft News describes the U.S. adult population by thousands of combinations of age, gender, education, location and several other demographics. Microsoft News takes the raw polling data and models how demographic groups  answered each question, and then projects those answers onto the true distribution of the demographic groups. The method was tested in the 2016 election and proven to be as accurate as other polling methods -- more details can be found here.

     

  • USFWS Mountain-Prairie // Flickr
    2/ USFWS Mountain-Prairie // Flickr

    #50. North Dakota

    Percent of income that goes to housing:

    50% or more: 4.2%
    35%–50%: 8.5%
    25%–35%: 22.8%
    10%–25%: 29.9%
    Less than 10%: 34.6%

    For a place where most people live in densely populated urban areas or on rural farmland, cities in the northernmost Great Plains state have experienced a great deal of economic prosperity as a result of the ever-increasing prevalence of the energy industry.

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    #49. South Dakota

    Percent of income that goes to housing:

    50% or more: 5.2%
    35%–50%: 10.2%
    25%–35%: 25.2%
    10%–25%: 30%
    Less than 10%: 29.4%

    The immense desirability of Sioux Falls, the largest city in the Mount Rushmore State, from a buyer standpoint has driven up housing costs, which has ultimately led to increased competition for homes in the lower price range and has made entering the market much more difficult.

  • Doug Kerr // Flickr
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    #48. Kansas

    Percent of income that goes to housing:

    50% or more: 5.3%
    35%–50%: 10.3%
    25%–35%: 25.2%
    10%–25%: 29.8%
    Less than 10%: 29.4%

    The Kansas Association of Realtors president Kathy Minden proudly reported that 2017 was the “sixth straight year for rising home sales across the state,” with sales increasing approximately 1.1% over the 2016 figure.

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    #47. Missouri

    Percent of income that goes to housing:

    50% or more: 5.3%
    35%–50%: 10.4%
    25%–35%: 25.1%
    10%–25%: 29.8%
    Less than 10%: 29.4%

    One of the fastest-growing big cities in America, Kansas City is a metropolis that receives rave reviews as a result of great amenities, high graduation rates, and an affordable cost of living. Kansas City’s increasing popularity has reached the point that some are referring to it as the “best big city to live in.”

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    #46. Nebraska

    Percent of income that goes to housing:

    50% or more: 5.4%
    35%–50%: 10.6%
    25%–35%: 25.6%
    10%–25%: 29.9%
    Less than 10%: 28.6%

    Nebraska has one of the healthier housing markets in the nation, as Zillow extends it a score of 9 out of 10. This has to do, in a large part, with the fact that Nebraska boasts a 0.8% mortgage delinquency rate, exactly half the national average of 1.6%.

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    #45. Wisconsin

    Percent of income that goes to housing:

    50% or more: 5.5%
    35%–50%: 13.8%
    25%–35%: 23.6%
    10%–25%: 30.6%
    Less than 10%: 26.5%

    Houses are simply “flying off the market” in Wisconsin’s state capital Madison, as it’s more widely being recognized as one of the best places to work, study, and raise a family. Home to the main campus of the University of Wisconsin, the city, which straddles Lake Monona and Lake Mendota, is considered one of the healthiest, greenest, and safest cities the country has to offer.

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    #44. Mississippi

    Percent of income that goes to housing:

    50% or more: 5.7%
    35%–50%: 12.3%
    25%–35%: 18.5%
    10%–25%: 32.5%
    Less than 10%: 31%

    The new bill is expected to hurt the housing market in a handful of states, and the Magnolia State is no exception. The deduction limit on new homes being cut to $750,000 is expected to cause the high-value market to take an especially strong hit.

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    #43. Indiana

    Percent of income that goes to housing:

    50% or more: 5.7%
    35%–50%: 14.2%
    25%–35%: 24%
    10%–25%: 30.2%
    Less than 10%: 25.9%

    According to Douglas M. McCoy, the director of the IU Center for Real Estate Studies at the Kelley School of Business, the market for single-family housing in Indiana is expected to remain as strong as it was in the year prior. He attributes this not only to steady job growth, but also to positive “economic fundamentals.”

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    #42. Iowa

    Percent of income that goes to housing:

    50% or more: 5.7%
    35%–50%: 11%
    25%–35%: 25.9%
    10%–25%: 29.7%
    Less than 10%: 27.6%

    While Iowa’s big metropolitan areas like Des Moines and Cedar Rapids are experiencing big booms, Iowa’s more rural areas are seeing a serious shortage of inventory, a problem which builders in the state are taking active efforts to rectify.

  • Ken Lund // Flickr
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    #41. Michigan

    Percent of income that goes to housing:

    50% or more: 5.8%
    35%–50%: 14.3%
    25%–35%: 23.8%
    10%–25%: 30.3%
    Less than 10%: 25.8%

    Buying patterns are expected to change especially in southeast Michigan, both for prospective homeowners in the Detroit area, as well as in surrounding suburban communities. While colonial-style homes may fall by the wayside, ranches are believed to be on the rise.

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    #40. Minnesota

    Percent of income that goes to housing:

    50% or more: 5.8%
    35%–50%: 11.2%
    25%–35%: 25.9%
    10%–25%: 30.1%
    Less than 10%: 26.9%

    According to the Minneapolis Area Association of Realtors, the average percent of original list price received by home sellers in the Twin Cities has shot up in the past decade, rising from 91% in 2011 to 100.2% in 2018. This represents not only a high in recent times, but the first time the indicator has eclipsed 100%, indicating a positive return on investment for sellers.

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    #39. Ohio

    Percent of income that goes to housing:

    50% or more: 5.9%
    35%–50%: 14.6%
    25%–35%: 24.2%
    10%–25%: 30.1%
    Less than 10%: 25.2%

    Columbus Monthly describes the immense growth of central Ohio’s housing market in recent years as nothing short of a “gold rush.” This is not only true of various neighborhoods in the state capital itself, the likes of which include Upper Arlington, Bexley, and Clintonville, but also in surrounding towns outside the metropolitan area.

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    #38. Illinois

    Percent of income that goes to housing:

    50% or more: 6.1%
    35%–50%: 14.8%
    25%–35%: 24.2%
    10%–25%: 30%
    Less than 10%: 24.9%

    One of the fastest expanding real estate markets amongst massive American cities, Chicago tops many investors’ lists for real estate with massive potential for growth. This has to do with not only the desirability of the properties, but the relative affordability as compared with other metro areas of its size. 

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    #37. Alabama

    Percent of income that goes to housing:

    50% or more: 6.3%
    35%–50%: 13.4%
    25%–35%: 19.4%
    10%–25%: 32.3%
    Less than 10%: 28.6%

    Zillow ranks Alabama as having one of the least healthy housing markets in the nation, coming in at an abysmal 1.2 out of 10. This comes as less of a shock when one learns that 2.3 in every 10,000 homes experience foreclosures, nearly 150% of the national average of 1.6.

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    #36. Tennessee

    Percent of income that goes to housing:

    50% or more: 6.4%
    35%–50%: 13.7%
    25%–35%: 19.6%
    10%–25%: 32.4%
    Less than 10%: 27.8%

    In the heart of the Volunteer State is the capital Nashville, one of the nation’s fastest-growing big cities. Though the city is welcoming of all the newcomers, it cannot necessarily meet the demand of all the fresh faces with its somewhat limited housing inventory, causing a spike of approximately 13% in average sale price.

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    #35. Kentucky

    Percent of income that goes to housing:

    50% or more: 6.7%
    35%–50%: 14.4%
    25%–35%: 20.1%
    10%–25%: 32.5%
    Less than 10%: 26.3%

    For the third straight year, Kentucky boasted record sales in 2017, having sold 53,058 total homes in 2017, which represented a 1.8% increase over 2016’s sale of 52,129 homes. While this an indicator of a positive state for the market, Realtor.com reports that inventory of homes on the market is at “its lowest level in at least two decades.”

  • katsrcool // Wikicommons
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    #34. Oklahoma

    Percent of income that goes to housing:

    50% or more: 7.2%
    35%–50%: 11.2%
    25%–35%: 23.4%
    10%–25%: 29.3%
    Less than 10%: 28.9%

    Experts in the Oklahoma housing market fear that President Donald J. Trump’s recent immigration bills will have a tangibly negative impact on real estate in the Sooner State. Rusty Appleton, an executive with the Central Oklahoma Home Builders Association, acknowledged that the immigrant workforce is responsible for “a large part of the new home construction industry.”

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    #33. Arkansas

    Percent of income that goes to housing:

    50% or more: 7.2%
    35%–50%: 11.2%
    25%–35%: 23.5%
    10%–25%: 29.2%
    Less than 10%: 28.8%

    Arkansas is one of the more noticeably struggling housing markets in the country with 12.6% of homes having negative equity, as compared with 10.4% as a natural average. That being said, home values rose more than 6% in 2017 and are expected to rise another 5% in 2018.

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    #32. Louisiana

    Percent of income that goes to housing:

    50% or more: 7.9%
    35%–50%: 11.9%
    25%–35%: 24.1%
    10%–25%: 29.2%
    Less than 10%: 26.8%

    In spite of being subjected to one of the worst natural disasters in American history, New Orleans has undergone a remarkable economic recovery over the past decade. Since Hurricane Katrina in 2005, the city’s housing market has risen about 50% and continues to recover as more people are moving back to the Big Easy.

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    #31. Texas

    Percent of income that goes to housing:

    50% or more: 7.9%
    35%–50%: 11.9%
    25%–35%: 23.9%
    10%–25%: 29.1%
    Less than 10%: 27.2%

    One of the nation’s largest states from both a size and population standpoint, Texas is one of those places whose cumulative statewide statistics are not necessarily indicative of the condition of local markets. Fort Worth and Houston, for example, each saw their respective housing markets grow about 5% over the past year, whereas Austin saw sales fall 6.7%.

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    #30. South Carolina

    Percent of income that goes to housing:

    50% or more: 8.5%
    35%–50%: 14.6%
    25%–35%: 23.4%
    10%–25%: 29.5%
    Less than 10%: 24%

    New York City residents looking to leave the city are looking nowhere else more regularly than Charleston, S.C., according to a recent report. The coastal metropolis offers those seeking refuge from cold, wintery weather a median home value of approximately $100,000 less than in the Big Apple.

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    #29. West Virginia

    Percent of income that goes to housing:

    50% or more: 8.7%
    35%–50%: 15%
    25%–35%: 23.7%
    10%–25%: 29.5%
    Less than 10%: 23%

    In West Virginia nearly 14% of homeowners are underwater on their mortgage payments, about 3.5% more than the national average. Charleston specifically has one of the least healthy housing markets of any U.S. capitol, scoring at just a 0.7 out of 10 according on Zillow.

  • Larry Johnson // Wikimedia Commons
    24/ Larry Johnson // Wikimedia Commons

    #28. Wyoming

    Percent of income that goes to housing:

    50% or more: 8.8%
    35%–50%: 13.5%
    25%–35%: 24.1%
    10%–25%: 23.8%
    Less than 10%: 29.8%

    Wyoming boasts not only one of the healthiest economies in general, but also one of the most booming housing markets of anywhere in the west. That being said, most states see home value increase approximately 34% annually while Wyoming’s homes increase in value only about 1% every year.

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    #27. Florida

    Percent of income that goes to housing:

    50% or more: 9.2%
    35%–50%: 15.3%
    25%–35%: 23.7%
    10%–25%: 29.1%
    Less than 10%: 22.7%

    Florida as a whole is seeing immense growth as a collective market, and this is something that can be seen in the individual progress in select urban areas. In the past year, Orlando saw prices increase 10% while sales went up 8%, and the Tampa market saw the sixth most loan applications of anywhere in the country.

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    #26. Georgia

    Percent of income that goes to housing:

    50% or more: 9.2%
    35%–50%: 15.4%
    25%–35%: 23.9%
    10%–25%: 29.4%
    Less than 10%: 22.1%

    While there is much more to the Georgia housing market than the state of its capital and largest metro area, Atlanta’s housing market is a fairly good indicator for the health of Georgian real estate at large. While the fact that the average cost of housing in the city is twice the national average is troubling alone, it is not helped by the fact that the current inventory is believed to be worth no more than a two-month supply.

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    #25. North Carolina

    Percent of income that goes to housing:

    50% or more: 9.3%
    35%–50%: 15.6%
    25%–35%: 24%
    10%–25%: 29.3%
    Less than 10%: 21.8%

    North Carolina boasts not one, but two of the top five real estate markets in the United States in Raleigh, ranked #2, and Charlotte, ranked #4. Each of these metropoli are recognized for having not only rising rental prices and home values, but also for “steady income growth, abundant job opportunities, and low unemployment rate.”

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    #24. Virginia

    Percent of income that goes to housing:

    50% or more: 9.5%
    35%–50%: 15.7%
    25%–35%: 23.9%
    10%–25%: 29.3%
    Less than 10%: 21.7%

    Virginia represents a unique case of two vastly different markets housed within the same state, as the north and south are indicative of very different realities. The median housing cost in the north is nearly $100,000 greater than it is closer to North Carolina, and while the north’s market is rapidly increasing, houses are staying on the market exceedingly long in the south.

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    #23. Montana

    Percent of income that goes to housing:

    50% or more: 10%
    35%–50%: 15.1%
    25%–35%: 25%
    10%–25%: 23.4%
    Less than 10%: 26.5%

    While the Billings real estate market experienced a noticeable lull during the winter leading into 2018, the market is now on the rise with a handful of ongoing construction projects. Rentals and for-sale homes alike are going up at faster rates in an attempt to overturn the problem of low inventory.

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    #22. Utah

    Percent of income that goes to housing:

    50% or more: 10.2%
    35%–50%: 15.8%
    25%–35%: 26%
    10%–25%: 23.5%
    Less than 10%: 24.5%

    Known in recent years by its severe lack of inventory and ever-rising prices, the Beehive State’s troubles from a housing perspective do not necessarily look to be trending in the right direction. With the population expected to double by the year 2065, it’s only reasonable to assume that prices will increase even more as homes become more in demand.

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    #21. Idaho

    Percent of income that goes to housing:

    50% or more: 10.3%
    35%–50%: 15.6%
    25%–35%: 25.5%
    10%–25%: 23.3%
    Less than 10%: 25.3%

    While you probably already knew it was the benchmark for the potato industry, you may not have known that Idaho boasts one of the healthier housing markets in the entire country. While per-square-foot housing costs are rising rapidly, homeowners have delinquent mortgages only 0.9% of the time, well below the national average of 1.6%.

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    #20. Arizona

    Percent of income that goes to housing:

    50% or more: 10.6%
    35%–50%: 15.7%
    25%–35%: 25.4%
    10%–25%: 23%
    Less than 10%: 25.2%

    2017 saw a noticeable uptick in not only the resale value of inventory, but also the number of agents and brokers responsible for selling these up-and-coming homes. Builders are also in the process of constructing enough projects in order to “meet demand” in the coming years.

  • Thomas Shahan // Wikicommons
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    #19. New Mexico

    Percent of income that goes to housing:

    50% or more: 10.9%
    35%–50%: 16.1%
    25%–35%: 25.7%
    10%–25%: 22.9%
    Less than 10%: 24.3%

    The Land of Enchantment truly lived up to its name in 2017, at least from a housing perspective, as the market underwent a record-setting year. The 22,221 New Mexico home sales represented a staggering double-digit percent increase over the 19,993 figure in 2016.

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    #18. Alaska

    Percent of income that goes to housing:

    50% or more: 11.1%
    35%–50%: 17.2%
    25%–35%: 25%
    10%–25%: 25.9%
    Less than 10%: 20.8%

    Apart from the dog sleds and igloos, Alaska also features one of America’s preeminent up-and-coming urban centers in the form of Anchorage, clocking in at about 300,000 residents. Though the city actually shrank in population in the year prior, the market has remained stable, with the average home sale price falling less than $1,000 from the 2016 average.

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    #17. Nevada

    Percent of income that goes to housing:

    50% or more: 11.1%
    35%–50%: 16.3%
    25%–35%: 25.8%
    10%–25%: 22.9%
    Less than 10%: 23.8%

    Though perhaps better known for being one of the world’s most popular “get-in-get-out” destinations, many American families are now deciding to call the capital of gambling home as the housing market is reaching unprecedented heights. Las Vegas alone now boasts the lowest vacancy rate in the entire country and new projects are going up faster than ever.

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    #16. Hawaii

    Percent of income that goes to housing:

    50% or more: 11.3%
    35%–50%: 17.8%
    25%–35%: 25.5%
    10%–25%: 25.2%
    Less than 10%: 20.3%

    It seems to go without saying that Hawaii residents would spend a lot on housing, because one might wonder what else people would need to be happy in one of the most beautiful places on Earth. The Oahu market has already notched record prices in 2018, and Darryl Macha, president of the Honolulu Board of Realtors, happily reported on the recent sales of a handful of luxury units.

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    #15. Colorado

    Percent of income that goes to housing:

    50% or more: 11.4%
    35%–50%: 16.7%
    25%–35%: 26%
    10%–25%: 22.9%
    Less than 10%: 22.9%

    With houses in the Denver metro area demanding astronomically high price pointsthe median cost of a starter home is $267,000buyers are coming to the realization they need to offer sellers outrageous incentives to close with them. Some are even reported to have gone to such great lengths as offering sellers trips to Paris of Broncos season tickets.

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    #14. Oregon

    Percent of income that goes to housing:

    50% or more: 12.1%
    35%–50%: 18.2%
    25%–35%: 25.3%
    10%–25%: 24.7%
    Less than 10%: 19.8%

    While Oregon may not be as popular a destination in 2018 as it was in 1836, families are still hopping in their caravans and deciding to call the Beaver State their new home at a fairly regular rate. This is something that is indicated by the stiff competition faced by first-time buyers, though that also has to do with a lack of supply in terms of inventory.

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    #13. New Hampshire

    Percent of income that goes to housing:

    50% or more: 12.3%
    35%–50%: 19%
    25%–35%: 21%
    10%–25%: 26.2%
    Less than 10%: 21.5%

    As one might expect, most states’ housing prices increase more quickly in the most densely populated regions, and New Hampshire is no exception. Hillsborough, Merrimack, and Rockingham Counties all saw rising prices last year at a rate, which noticeably exceeded more rural locations in the Granite State.

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    #12. Maine

    Percent of income that goes to housing:

    50% or more: 12.5%
    35%–50%: 19.2%
    25%–35%: 21%
    10%–25%: 26%
    Less than 10%: 21.3%

    Though Maine began the year proudly continuing its streak of record sales of single-family homes, more recent months have seen not only a decrease in sales, but an unsustainable rise in prices. In March of this year, home sales were down nearly 3% than March of the year prior.

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    #11. Washington

    Percent of income that goes to housing:

    50% or more: 12.5%
    35%–50%: 18.6%
    25%–35%: 25.3%
    10%–25%: 24.7%
    Less than 10%: 19%

    By seemingly every measurable metric, Washington has one of the strongest housing markets in the nation today. The northwesternmost state in the continental United States not only features residents who are delinquent on their mortgages a mere 1% of the time, but a measly 6.6% of homes with negative equityas compared with the 10.4% national average.

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    #10. California

    Percent of income that goes to housing:

    50% or more: 12.5%
    35%–50%: 18.5%
    25%–35%: 25.4%
    10%–25%: 24.5%
    Less than 10%: 19.1%

    In what many people perceive to be a thriving Southern California housing market, some analysts are finding holes that suggest a potential cooling off in the near future. Certain counties in the region have seen sales down as much as 9% since the year prior.

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    #9. Pennsylvania

    Percent of income that goes to housing:

    50% or more: 12.8%
    35%–50%: 18.2%
    25%–35%: 23.3%
    10%–25%: 26.4%
    Less than 10%: 19.3%

    According to Zillow, the Keystone State has a dangerously unhealthy housing market at a cumulative score of 2.4 out of 10, and while houses are staying on the market for a shorter period of time than they were a month ago, they still last more than 100 days on average, which greatly exceeds the national average.

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    #8. Vermont

    Percent of income that goes to housing:

    50% or more: 13%
    35%–50%: 19.8%
    25%–35%: 21.2%
    10%–25%: 25.6%
    Less than 10%: 20.4%

    Known for being one of the more affluent states in America, Vermont is a difficult place to afford the costs of living unless one is particularly well off, and the data supports it. A recent report showed Vermonters making minimum wage have to work 1.7 jobs in order to make enough for just a one-bedroom rental.

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    #7. Connecticut

    Percent of income that goes to housing:

    50% or more: 13.1%
    35%–50%: 19.8%
    25%–35%: 21.1%
    10%–25%: 25.6%
    Less than 10%: 20.4%

    While one could see the $234,800 median home value and assume Connecticut was all middle-class Americans, this figure does not capture the overwhelming wealth disparity the state stuffers. Some of the richest communities like Stamford and Norwalk boast median home values at or exceeding $400,000 while many poorer communities experience negative equity on their homes and delinquencies on their mortgage payments.

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    #6. Delaware

    Percent of income that goes to housing:

    50% or more: 13.3%
    35%–50%: 18.7%
    25%–35%: 23.4%
    10%–25%: 25.9%
    Less than 10%: 18.7%

    Delaware has developed into nothing short of a seller’s market in recent years, as houses are “flying off the shelves” within days of listing. This is the result of both a severe lack of inventory and an incredible demand from prospective Delaware homeowners.

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    #5. Massachusetts

    Percent of income that goes to housing:

    50% or more: 13.5%
    35%–50%: 20.2%
    25%–35%: 21.3%
    10%–25%: 25.4%
    Less than 10%: 19.7%

    The lack of housing supply in Massachusetts is frankly so bad that Eric Berman, the communications director of the Massachusetts Association of Realtors, has admitted that “the problem is there are no homes for sale.” When words like that are coming from the top, one can expect a great deal of competition when looking for houses in the Bay State.

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    #4. New York

    Percent of income that goes to housing:

    50% or more: 13.5%
    35%–50%: 18.8%
    25%–35%: 23.3%
    10%–25%: 26%
    Less than 10%: 18.4%

    What more can be said that hasn’t already about the most expensive city in America? While the housing market in the Big Apple is world-renowned for being amongst the most competitive, the market upstate has been struggling ever since the 2008 financial crisis, but annual home sales have risen out of the ashes since their low point in 2011.

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    #3. New Jersey

    Percent of income that goes to housing:

    50% or more: 13.6%
    35%–50%: 18.8%
    25%–35%: 23.3%
    10%–25%: 25.9%
    Less than 10%: 18.4%

    The Garden State’s housing market is one which varies tremendously depending on specific location, especially when one considers the differing degrees to which counties were impacted by Hurricane Sandy. As is the case with much of the nation, the South Shore suffers from a severe lack of inventory, especially with demand through the roof and projects ongoing in an attempt to rectify the damage caused by the 2012 superstorm.

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    #2. Rhode Island

    Percent of income that goes to housing:

    50% or more: 13.8%
    35%–50%: 20.5%
    25%–35%: 21.4%
    10%–25%: 25.1%
    Less than 10%: 19.2%

    In 2017, the median cost of a single-family house in Rhode Island rose to $255,000, representing a 13% increase since 2015 and a massive 35% increase since 2012. This points heavily in favor of a sellers’ market, a point which is only further supported when one considers the “huge demand” to live in Rhode Island, as articulated by John Marcantonio, the head of the Rhode Island Builders Association.

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    #1. Maryland

    Percent of income that goes to housing:

    50% or more: 13.9%
    35%–50%: 19.2%
    25%–35%: 23.6%
    10%–25%: 25.8%
    Less than 10%: 17.5%

    A handful of factors help keep Maryland’s housing market somewhat stable, not the least of which is the constant demand for on-campus property at some of the state’s preeminent colleges. Both the University of Maryland and Johns Hopkins University have represented consistent pillars in maintaining homeostasis in Baltimore’s market.

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