The Cheapest State to Buy a House in 2024: U.S. City Guide

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Finding the cheapest state to buy a house in 2024 is crucial for many aspiring homeowners looking to maximize their investment in the U.S. housing market. Amongst states like West Virginia, with an enticing median home value of $143,200, and Alabama, celebrated for its low property tax rate, the landscape of affordability is diverse. These states, alongside others like Oklahoma, Louisiana, and Mississippi, boast median home values well under $200,000, offering a beacon of hope amidst rising national averages.

The tapestry of the U.S. real estate market, marked by fluctuating interest rates and the varying cost of living across metro areas, sets a complex stage for first-time buyers and those seeking affordable housing. This article navigates through the nuances of state-level homeownership trends, urban versus rural rates, and other economic factors influencing the landscape. By exploring the best places for housing affordability in an era of high mortgage rates and limited housing supply, it aims to provide prospective buyers with a valuable guide to making one of the most significant purchases of their lives in 2024.

Homeownership and Economic Factors

In the landscape of homeownership and its intertwined relationship with economic factors, several key elements emerge as pivotal in understanding the dynamics of the U.S. housing market in 2024. Among these, interest rates, inflation, and the Federal Reserve’s monetary policy stand out, directly influencing mortgage rates and, by extension, the housing market’s accessibility.

  • Interest Rates and Mortgage Rates:
    • The Federal Reserve’s stance on not cutting rates until at least the summer, coupled with potential inflation surprises, suggests that mortgage rates will remain elevated. Specifically, forecasts indicate rates staying above 6.5% for the near term. This elevated level contributes to a challenging environment for prospective buyers, especially first-time buyers navigating the complexities of the real estate market.
    • A modest recovery in home sales is anticipated, as mortgage rates are expected to decrease slightly in the latter half of the year. However, the early months of 2024 will likely see continued pressure from high rates.
  • Economic Growth and Housing Market Dynamics:
    • Economic growth in 2024 is expected to be modest, with a slight increase in the unemployment rate and a moderating yet above-target inflation rate. These factors contribute to a cautious optimism regarding payroll employment growth and a gradual easing of inflation pressures.
    • The housing market itself faces challenges from not only high mortgage rates but also a significant lack of inventory. Despite these hurdles, there are signs of improvement. For instance, existing inventory is beginning to show signs of loosening, and the outlook for home builders is becoming more positive. This improvement is crucial for addressing the ongoing housing shortage and stimulating the housing market.
  • Home Prices and Sales Trends:
    • Home prices are forecast to continue their upward trajectory, with a predicted increase of 2.5% in 2024. This continued rise in home prices places additional pressure on affordability, particularly in regions with already high living costs.
    • Due to households moving for life events, existing-home sales are trending upward, which will support an increase in sales transactions. This trend suggests a market that, while facing challenges, is adapting and potentially becoming more accessible to a broader range of buyers.

In conclusion, a variety of economic factors will influence the homeownership landscape in 2024, with interest rates, economic growth, and housing market dynamics playing major roles. The interplay between these elements will influence the feasibility of homeownership for many Americans, highlighting the importance of monitoring these trends for both prospective buyers and stakeholders in the real estate market.

State-level Homeownership Trends

Analyzing homeownership trends at the state level reveals significant disparities influenced by a variety of factors. Coastal and southern states, for instance, have seen a more pronounced decline in homeownership rates when compared to their landlocked counterparts. This trend underscores the impact of geographic location on the real estate market. Specifically, New York stands out with the lowest homeownership rate at 54.1%, a stark contrast to West Virginia, which boasts the highest rate at 74.5%. These figures highlight the diverse landscape of homeownership across the United States, influenced by factors such as population density and domestic migration trends.

  • Geographic Impact on Homeownership Rates:
    • Coastal and Southern States: significant decline in homeownership rates.
    • New York: lowest homeownership rate (54.1%).
    • West Virginia has the highest homeownership rate (74.5%).
  • Influencers of Homeownership Rates:
    • Population density is a key factor affecting state-level homeownership.
    • Domestic migration influences the dynamics of homeownership rates by state.

The disparities in homeownership rates extend beyond geographic location and are deeply intertwined with racial and ethnic backgrounds. In 2022, white Americans experienced the highest homeownership rates in states like Delaware (83%), South Carolina (79%), and Michigan (79%), while the lowest rates were observed in the District of Columbia (47%), Hawaii (59%), and California (63%). For Black Americans, Mississippi (57%), South Carolina (55%), and Delaware (55%) had the highest rates, contrasting sharply with North Dakota, Wyoming (both 19%), and Wisconsin (26%). Asian Americans saw the highest homeownership rates in South Carolina, Hawaii, and Maryland (all 74%), with the lowest in North Dakota (28%), South Dakota (32%), and the District of Columbia (39%). Hispanic Americans experienced the highest rates in New Mexico (71%), Vermont, and Wyoming (both 65%), and the lowest in New York (28%), Massachusetts (33%), and Rhode Island (36%).

  • Homeownership Rates by Racial and Ethnic Groups:
    • White Americans: highest in Delaware, South Carolina, and Michigan. Lowest in D.C., Hawaii, and California.
    • Black Americans: highest in Mississippi, South Carolina, and Delaware. Lowest in North Dakota, Wyoming, and Wisconsin.
    • Asian Americans: Highest in South Carolina, Hawaii, and Maryland. Lowest in North Dakota, South Dakota, and D.C.
    • Hispanic Americans: Highest in New Mexico, Vermont, and Wyoming. Lowest in New York, Massachusetts, and Rhode Island.

These findings underscore the persistent disparities in homeownership rates among different racial and ethnic groups, with the gap between Black and white homeownership rates widening since 2012. Despite a consistent growth in homeownership rates across all racial and ethnic groups over the past decade, the rate among Black individuals remains below 45%. Conversely, the homeownership rate among Asian Americans indicates a robust upward trend, reflecting changing dynamics in the U.S. housing market. The National Association of REALTORS® provides further insights into these trends, offering profiles of home buyers categorized by racial and ethnic groups at the metropolitan level, which helps in understanding the nuanced landscape of homeownership in the United States.

Urban vs. Rural Homeownership Rates

Homeownership rates across the United States exhibit notable variation when comparing urban, suburban, and rural areas. This distinction is crucial for understanding the broader dynamics of the housing market and the preferences of prospective buyers in different settings.

  • Homeownership Rates by Location:
    • Urban Areas: Cities like Newark, NJ, demonstrate the lower end of the spectrum with a homeownership rate of 29.6%, reflecting the challenges of affordability and availability in densely populated urban centers.
    • Suburban and Rural Areas: In contrast, Port St. Lucie, FL, showcases a high homeownership rate of 84.6%, indicative of the appeal of suburban and rural settings for homeownership due to factors such as a lower cost of living and more available space.

The preferences of residents across these areas towards housing policy reforms highlight a collective support for measures aimed at increasing housing affordability and availability.

  • Support for Housing Policy Reforms:
    • Conversion of Non-Residential Spaces: A significant majority of rural (82%), suburban (80%), and urban (80%) residents support the conversion of commercial buildings into housing units, demonstrating a shared interest in diversifying housing options.
    • Accessory Dwelling Units (ADUs): There is notable support for allowing apartments over garages or in backyards, with 79% of rural, 68% of suburban, and 74% of urban residents in favor. This suggests a growing acceptance of ADUs as a solution to housing shortages.
    • Simplification of Permitting Processes: An overwhelming majority, with 86% of rural, 85% of suburban, and 87% of urban residents, advocate for simplified and faster permitting for housing development, underscoring the universal demand for streamlining bureaucratic processes to facilitate housing projects.

Initiatives like The Meadows Apartments in Darlington, Wisconsin, which offers farm workers affordable housing options, and the “Taking Stock” report by the Housing Assistance Council, which emphasizes the urgent need for affordable rental housing in rural communities, further illuminate these trends. The report reveals that 25% of rural households allocate more than 30% of their monthly income to housing, with nearly half of rural renters considered “cost-burdening.”. This situation is exacerbated for rural renters of color, pointing to the urgent need for policy interventions to address housing affordability and quality, particularly in rural areas where homeownership is more prevalent but the rental market remains constrained.

Generational Homeownership Patterns

The generational patterns in homeownership reveal a complex interplay between economic capability, market conditions, and personal preferences. These patterns are not only indicative of the current state of the housing market but also offer insights into its future trajectory.

  • Baby Boomers:
    • Homeownership Rate: This represents the largest segment of homeowners by generation, with a significant portion (73%) having resided in their current homes for over a decade. This demographic’s reluctance to move (55% have no plans to relocate) contributes to the current housing inventory shortage.
    • Property Conditions: A substantial 68% of homes owned by baby boomers are over 30 years old, with many lacking updates or improvements. This situation points towards a potential underinvestment in housing, as these properties may not meet the safety and accessibility needs of aging individuals.
    • Market Impact: The “silver tsunami” anticipated from downsizing baby boomers is expected to introduce 9 million homes to the market over the next decade. However, this influx is predicted to be gradual, mitigating immediate impacts on housing supply and prices.
  • Millennials:
    • Homeownership Rate: Only a third of millennials currently own homes, reflecting challenges such as high prices and limited inventory. With 84% of this generation expressing a desire to move and nearly half (47%) aiming for larger homes, changing household needs are influencing their entry into the housing market.arket.
    • Market dynamics: The generational divide in homeownership is making the market for millennials more difficult to navigate due to a lack of inventory and high prices. The demand from millennials, coupled with the expected influx of homes from baby boomers, presents both challenges and opportunities for the housing market.

The interaction between these generational trends underscores the evolving nature of the U.S. housing market. Baby boomers’ properties, often older and not updated, contrast with millennials’ desire for more spacious and modern homes. This disparity highlights the need for targeted policies and market strategies to address the diverse needs of different generations, ensuring the availability of suitable and affordable housing options for all.

Future Projections and Policy Implications

As we look toward the future of the housing market in 2024, several projections and policy implications emerge, shaping the landscape for prospective buyers, real estate agents, and policymakers. Geographical trends, monetary policies, and technological advancements are just a few of the variables that affect market dynamics. Here, we delve into these aspects to provide a comprehensive outlook:

2024 Housing Market Trends and Predictions:

  • Coastal Florida Home Prices:
    • Predicted to fall due to a combination of the pandemic price surge correction and increasing climate disaster risks.
  • Affordable and climate-resilient metros:
    • Cities like Albany, NY, Rochester, NY, and Grand Rapids, MI, are anticipated to see a rise in home prices, driven by their affordability and resilience to climate change.
  • Rental market dynamics:
    • The supply of multi-family housing is gradually outpacing demand, leading to a mild decline in median asking rents, providing some relief in the rental market.

Policy Implications:

  • Mortgage Rates and Market Affordability:
    • The trajectory of mortgage rates remains a wildcard, significantly impacting market affordability. A decrease and stabilization in mortgage rates in 2024 are expected to increase buyer demand and improve home affordability.
  • Housing affordability and demographic shifts:
    • The rising cost of living in major urban centers is prompting migration toward more affordable areas, necessitating policy measures to enhance housing affordability across different regions.

Technological Advancements and Real Estate:

  • Gemma Models and Real Estate:
    • Gemma models, available in two sizes (Gemma 2B and Gemma 7B), offer pre-trained and instruction-tuned variants that can assist in real estate market analyses and predictions. These models can run on laptops, workstations, or cloud platforms, making them accessible to real estate agents and analysts for data processing and trend analysis.
  • Responsible AI in Real Estate:
    • Designed with Google’s AI Principles, Gemma models incorporate automated data filtering and reinforcement learning from human feedback for safety, ensuring responsible usage in real estate market analyses. This approach can aid in creating more accurate and ethical market predictions and analyses.

In conclusion, a variety of factors, including geographic trends, economic policies, and technological advancements, will shape the housing market in 2024. The decline in coastal Florida home prices, the rise in affordable and climate-resilient metros, and the evolving dynamics of the rental market are key trends to watch. Policy measures aimed at stabilizing mortgage rates and enhancing housing affordability will be crucial in addressing the challenges faced by prospective buyers and those affected by demographic shifts. Additionally, the advent of technological tools like Gemma models offers new avenues for market analysis, making it easier for stakeholders to navigate the complexities of the real estate market.

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Through this comprehensive exploration of real estate dynamics, we’ve journeyed across the varied landscape of the United States’ housing market, contrasting the appeal and challenges of states like West Virginia and Alabama with the bustling markets of New York and California. Key insights reveal a marked diversity in affordability, with certain states offering a glimmer of hope for aspiring homeowners amidst daunting national trends. The interplay between economic factors—such as high mortgage rates and the Federal Reserve’s policies—against the backdrop of the housing supply shortage underlines the complexity of navigating the U.S. real estate market in 2024. Moreover, the nuanced trends across urban, rural, and suburban settings, alongside generational shifts in homeownership desires and challenges, add layers of depth to understanding market dynamics and the pursuit of home ownership.

The findings highlighted in this article reflect a real estate market at a crossroads as we approach 2024 under the influence of a confluence of economic, demographic, and policy factors. The potential shifts in market affordability, the critical role of housing policy reform, and the emerging solutions to housing shortages present both challenges and opportunities for prospective buyers. With an eye towards the future, it becomes essential for both buyers and industry stakeholders to remain informed and adaptive. The National Association of Realtors provides an invaluable resource for those seeking to understand the intricacies of the market and navigate the complexities of homeownership. Their insights can guide first-time buyers, offer a beacon for affordable housing solutions, and highlight the most opportune moments for entering the market. As we look ahead, the evolving real estate landscape continues to offer a mix of challenges and opportunities, underscored by the importance of staying informed and proactive in one’s homeownership journey.

It’s critical to recognize how economic variables, such as the stock market and average mortgage rates, shape trends as we examine the future of the US housing market. Because of their plentiful job opportunities and reasonably priced single-family homes, cities like San Antonio are becoming more and more popular among young professionals. Savvy shoppers can still find excellent bargains despite higher prices in some areas, particularly in reasonably priced cities with expanding job markets. Despite obstacles, the national housing market is showing signs of recovery, especially in new home sales, according to a recent Freddie Mac report. For those looking to buy their first home or for those with a growing family who need more space, this is good news. When budgeting for a home purchase, however, potential buyers should be aware of their gross income as well as the annual rate of price increases over the previous two years.

It’s critical to investigate all options in the most expensive states, including down payment assistance programs and knowing how property taxes affect monthly mortgage payments. When it comes to the best time to buy and the most desirable housing markets, real estate brokers and agents can offer invaluable advice. Experts anticipate that American house prices will rise gradually over the coming years, with some cities seeing more notable increases in response to factors like urbanization and job growth. However, many Americans may still face difficulties due to high home prices and the typical 30-year mortgage rate, particularly in coastal cities like San Diego and San Jose. It’s a good idea for people who are thinking about moving to investigate various American cities and their housing markets, taking into account things like median sale prices and the cost of living. Achieving a favorable equilibrium between cost and standard of living is ultimately crucial for a home buyer in the current housing market.


1. Is it expected that housing prices will decrease in the USA in 2024?
No, experts do not anticipate a housing market crash in 2024. The combination of stricter lending standards than before the Great Recession, along with ongoing low inventory and high demand, suggests that the housing market is unlikely to face a downturn next year.

2. Will buying a house be more feasible in 2024?
Most experts believe that the housing market will not crash in 2024, as many homeowners have accumulated substantial equity. However, the main concern is the affordability crisis, with high interest rates and inflated home values posing significant challenges for first-time buyers.

3. In which state can you get the most house for your money?
The states where your money can purchase the most houses include Indiana, Mississippi, Arkansas, Ohio, West Virginia, Alabama, and Oklahoma. For instance, in Alabama, the median home price of $92 per square foot means you can get a 3,256-square-foot home for $300,000, and in Oklahoma, the same amount can buy you a 3,175-square-foot home on average.

4. Which state has the most affordable houses in the US?
According to Forbes, the states with the lowest average home prices are West Virginia, Arkansas, Iowa, Alabama, Mississippi, Kentucky, Nebraska, and Ohio, with West Virginia leading as the state with the most affordable homes.

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