Want a “Cheap” House? Move to Ohio and Don’t Look Back

If you compare average income with housing costs, middle America has the least worst ratio. But calling homes there affordable ignores the systemic roots of wages vs. housing.

A report from wealthofgeeks.com suggests that Ohio is the most affordable place to buy a home in the United States. 

They report: “In the first place, with the most affordable houses in the nation, is Ohio. The average house costs 3.99 times the annual salary within the state, which is $62,556. The average price of a house in the state is $249,900, which is 41.9% cheaper than the average cost of a home nationally, at $429,896. Ohio has the second cheapest homes in the nation on average, behind West Virginia at $231,000.”

Other “winning” states include Michigan, Illinois, and Pennsylvania, with home prices all hovering in the “4 times the annual salary.” range.

Hold the Applause

Before we get too excited about a few states bucking the trend toward exorbitant home prices, let’s look back to 1970, at the same wage to housing cost metric. That year, the median home price was $23,400, and the average income was $9,432, resulting in a cost-to-income ratio of 2.48.

That ratio fluctuated a little, but stayed below a three-year payback for 50 years from 1970 to 2020. It even dropped to 2.4 years in 2000, rising to 2.91 years in 2020. 

Here’s a line chart to visually represent this disparity between average household income and median home prices over time. 

The line chart above illustrates the disparity between median home prices and average income in the United States from 1970 to 2020. It visually represents how median home prices have increasingly outpaced incomes, especially in recent decades, highlighting the growing challenge of housing affordability.

The trend indicates a widening gap, making it increasingly difficult for average Americans to afford homes relative to their incomes. For a deeper dive into this topic, take a look at the video below. The author of a new book called The Algebra of Wealth does not let the Boomer generation throw up their hands and act as if the matter is out of their control. They created a less prosperous scenario for their children, and own the responsibility.