5 US states where you only need to make about $40,000 a year to afford the average home

The income you need to afford a home in the biggest U.S. cities

Have houses in the U.S. gotten too expensive? It depends. Financial website How Much used data from real-estate site Zillow to collect home prices for every state to find the minimum income needed to afford a place there and found that, in some areas, the income necessary is well below the national average.

Using a mortgage calculator, How Much calculated monthly payments, including the principal and the interest for an assumed home loan: "The interest rate varied from 4-to-5 percent in each state, depending on the market. The lower the rate, the lower the monthly payment. We assumed buyers could contribute a 10 percent down payment."

Based on that data, here are five states where you can afford a home while making an annual salary of around $40,000:

West Virginia 

Minimum annual income: $38,320
Average home value: $149,5000


Minimum annual income: $38,400
Average home value: $149,900


Minimum annual income: $40,800
Average home value: $160,000


Minimum annual income: $41,040
Average home value: $161,000


Minimum annual income: $42,200
Average home value: $165,900

How much more it costs to own vs. rent in your state

At the other extreme, "there are several pockets in which only the upper-middle class and above can afford to own even the average home, most notably across the West and in the Northeast, " How Much notes. In Hawaii, the median home value is $610,000. In California, it's $499,900.

"Our map creates a quick snapshot of housing across the United States, " writes How Much. Even though there are certain high-profile states where finding a home could be more difficult, "the best takeaway is that housing remains affordable in large swaths of the country."

If you're thinking of buying a home, check out these tips to get started.

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Don't miss: 5 US states where you need to make about $100,000 to afford 'the average home'

Video by Mary Stevens and Andrea Kramar

Location alone won't determine if your home is a great investment, but this will
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