Starter Home Affordability by State: Mississippi Leads, Rhode Island Worst

LendingTree's analysis reveals stark geographic disparities in starter home affordability across the U.S. In Mississippi, 61.8% of nonhomeowner households can afford a starter home, the highest share nationally, with an average price of $85,000 and a required income of $29,523. West Virginia follows at 58.0% ($90,000, $29,114), Arkansas at 54.3% ($110,000, $37,862), Alabama at 54.1% ($120,000, $39,239), and North Dakota at 52.7% ($150,000, $48,785). At the other extreme, Rhode Island has the lowest share at 16.5%, with a $350,000 starter home and a $107,581 income requirement. Utah (19.1%, $400,000, $112,351), Hawaii (19.2%, $500,000, $133,856), Colorado (19.3%, $400,000, $121,598), and California (21.3%, $482,000, $140,676) also rank among the least affordable. The national median nonhomeowner household earns about $7,000 less than needed for a starter home. Millennials are closest to closing the gap, while baby boomers face the biggest shortfall. Price-to-income ratios range from 2.19 in Mississippi to 7.12 in Hawaii. Factors driving unaffordability include limited land (Rhode Island), high demand (Utah), import costs (Hawaii), and tax/insurance variations (Colorado). The analysis defines a starter home as one at the 25th percentile of local owner-occupied prices.