If you’re in the market to buy a house, you’d better be prepared to fight for it. A shortage of homes for sale in many markets is contributing to record-high real estate prices across the country. Many buyers are finding it difficult, if not impossible, to find properties for sale in their price range, according to research from the National Association of Realtors.
“Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and home builders have not boosted production enough to meet rising demand,” said Lawrence Yun, the association’s chief economist.
The affordability problem is particularly acute in the West. Hawaii, California, and Oregon were among the least affordable states for buyers, according to National Association of Realtors research. As a result, home ownership rates are stuck at near-record lows, as younger people and those with lower income are shut out of the housing market.
“This shortfall of inventory at a time of healthy job gains in most states is one of the biggest reasons for the depressed share of first-time buyers and the inability for the home ownership rate to rise above its near-record low,” Yun said. “The only prescription to reversing this adverse situation is to build more entry-level and mid-market housing that aligns with current household incomes.”
A look at average home prices in different states gives an idea of where it’s hardest for people to get a foot in the real estate market. But purchase price isn’t the only expense buyers face. Closing costs add another $2,128 to the price of the average home, according to Bankrate.
To find out what it really costs to buy a house, we looked at Bankrate’s data on both median home price and average closing costs to determine the 13 most expensive states in the U.S. to become a homeowner. We’ve also included some information on what kind of home you can expect to get for the average selling price in that state.
Home listings from Zillow as of Feb. 17, 2017. Estimated mortgage payments assume a 20% down payment.