The hot housing market has shown signs of cooling. Nationally, home prices have declined by 1.3% since their peak in June 2022. And some experts have predicted that housing could fall as much as 20%. Regionally, the majority of housing markets are expected to see price drops toward the end of this year. For prospective buyers and current owners, this could signal opportunities to make the most of the housing market.
To determine which states are best for homeowners, we compared all 50 states across 11 metrics on topics exploring homeowner costs such as taxes, closing costs and homeowners insurance. For a breakdown of our data sources and how we put all the information together to create our final rankings, read the Data and Methodology section below.
This is SmartAsset’s eighth study on the best states for homeowners. Check out the 2021 edition here.
- Roughly 22% of households in the U.S. are housing cost-burdened. Housing cost-burdened refers to households that spend more than 30% of their income on housing costs. The state with the lowest percentage of households that are housing cost-burdened is West Virginia. The state with the highest is Hawaii.
- Just one Northeast state made the top 10. Vermont ranks No. 7 overall and the next Northeast state on the list is Maine at No. 11. The Midwest, West and South have an equal distribution of states in the remaining nine spots.
- Despite the challenging economy, home values grew between 2021 and 2022. Nationally, home values increased by 12.4%, and 21 states exceeded that figure. Florida, South Carolina and Tennessee (all Southern states) experienced the largest growths (25.0%, 21.0% and 20.8%, respectively).
1. West Virginia
The Mountain State offers more than tall, rocky landscapes as it ranks as the best state for homeowners. West Virginia is also No. 1 for having the lowest percentage of households that are housing cost-burdened, with those who pay more than 30% of their income on housing (14.86%). The state also ranks No. 2 for both the home value-to-household income ratio (2.79) and median annual property taxes ($785).
Like the No. 1 ranking state, Indiana carries a lower percentage of households that are housing cost-burdened (15.85%, ranking No. 2 for this metric). Homebuyers can expect to pay roughly $2,700 in closing costs (third-lowest). Homeowners can expect to pay under $1,400 in property taxes (eighth-lowest).
Idaho has the ninth-highest median home value, which falls just under $450,000. Homeowners will typically pay just over $1,000 in homeowners insurance annually and an effective property tax rate of 0.49% (both of which rank fifth-lowest study-wide). Additionally, closing costs make up less than 1% of the median home value (eighth-lowest).
In Wyoming, median annual property taxes are the 11th-lowest ($1,452) and the effective property tax rate is the 10th-lowest (0.55%). Home values have increased by nearly 13% over a one-year period (19th-highest) and closing costs for homebuyers typically cost 1.25% of the median home value (16th-highest).
5. North Carolina
In North Carolina, the median home value is roughly $275,500, which is up 19.63% over a one-year period between 2021 and 2022. For prospective homebuyers, this state has the ninth-lowest closing costs ($2,904, typically making up less than 1.5% of the home’s value). Median annual property taxes are also on the lower side, ranking No. 14 at $1,668.
Wisconsin ranks in the top third across the country for its percentage of households that are housing cost-burdened (18.49%). In regards to housing costs, Wisconsin homeowners can expect the eighth-lowest homeowners insurance costs annually (roughly $1,100), while Wisconsin homebuyers can expect the 14th-lowest average closing costs ($3,096).
The median home value in Vermont hovers around $321,000 (19th-highest), which is up 16.46% since 2021. This home value appreciation ranks seventh-best in our study. Vermont also has both the second-lowest foreclosure rate (less than one for every 10,000 houses) and average annual homeowners insurance ($825).
In Kentucky, less than 18% of households are housing cost-burdened (12th-best) and there is less than one foreclosed home for every 10,000 houses (sixth-best). Annual property taxes work out to a median $1,382 and the effective property tax rate is 0.80%. Homebuyers interested in The Bluegrass State can expect typical closing costs below $2,000.
9. South Dakota
Like the previous two states, South Dakota also has a low rate of foreclosure. In fact, it has the lowest rate across all 50 states. Additionally, less than 18% of South Dakota households are housing cost-burdened (13th-best). Home values in the state have increased by 14.38% between late 2021 and 2022, rising to a median $268,094.
Montana ranks No. 10 for both its median home value ($394,106) and closing costs as a percent of home value (1.03%). Encouraging news for homeowners: Home values in the state have seen large growth relative to the rest of the country, increasing by nearly 18% over a one-year period between 2021 and 2022 (sixth-highest).
Data and Methodology
To find the best states for homeowners, we compared data for all 50 states across a total of 11 metrics. Seven of those metrics were given a full weight, shown below:
- Median home value. Data comes from Zillow and is for 2022.
- Home value appreciation. This is the percentage change in the median home value from October 2021 to October 2022. Data comes from Zillow.
- Home value to household income ratio. This is the median home value divided by the median household income. Data comes from the Census Bureau’s 2021 1-year American Community Survey.
- Foreclosures per 10,000 homes. Data comes from SoFi and is for September 2022.
- Average annual homeowners insurance. Data comes from ValuePenguin and is for October 2022.
- Burglary rate. This is the number of burglaries per 100,000 residents. Data comes from the FBI and is for 2020.
- Percent of households that are housing cost-burdened. This measures households that spend 30% or more of their income on housing. Data comes from the Census Bureau’s 2021 1-year American Community Survey.
We assigned a half weight to the remaining four metrics:
- Median annual property taxes. Data comes from the Census Bureau’s 2021 1-year American Community Survey.
- Effective property tax rate. This is the median annual property taxes paid divided by the median home value. Data for both components comes from the Census Bureau’s 2021 1-year American Community Survey.
- Average closing costs. Data comes from SmartAsset’s closing costs calculator and is as of October 2022.
- Average closing costs as a percentage of median home value. This is the average closing costs divided by the median home value. Data comes from SmartAsset’s closing costs calculator and the Census Bureau’s 2021 1-year American Community Survey.
After ranking each state in every metric, we then found each state’s average ranking. The state with the best average ranking places first in our study while the state with the lowest average ranking places last.
Tips for Homeowners
- Know what to expect. Before you can make the offer, be sure to understand what costs you’ll incur. To get started, use our mortgage calculator to help you understand what your mortgage will be based on the size of your next home.
- Do your research. Find the best deals when shopping for a mortgage lender. SmartAsset has reviewed different lenders to help you compare several options before you get started.
- Work with an expert. SmartAsset's free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Questions about our study? Contact us at firstname.lastname@example.org
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