Average House Prices By State in 2025: The Least and Most Affordable U.S. States

The Least and Most Affordable U.S. States 

What are the least and most affordable states in the United States? If you're interested in buying, here are the average house prices by state in 2025!

Affordability is the number one factor to consider when buying a home. Generally speaking, many homeowners can afford a mortgage between two and two and a half times their annual gross income. 

Most lenders use the 28%/36% rule to calculate the amount of housing debt one should agree to. This rule states that a maximum of 28% of one's gross monthly income should be spent on housing expenses, while no more than 36% should be spent on debt payments, including loan payments and credit cards. 

Mortgage rates have come down from their peak as of the beginning of 2025, but they are still high. Low inventory levels also mean that sellers have the upper hand in the market. 

If you are among the many who are interested in buying a home but are concerned about the cost, it is very important to consider average house prices by state when deciding where to live. 

According to current moving trends, states such as California and New York, which are notorious for their high cost of living and expensive housing prices, are seeing a decline in population as more and more people choose to move to cheaper areas. 

The Southeast, on the other hand, is known for its affordable housing prices, which make it attractive to homebuyers. As young professionals and families looking to buy homes, the region continues to experience population gains rather than losses. 

While affordability is a driving factor for people to relocate to another state, it is also important to understand regional nuances regarding affordability, especially since some states offer sought-after amenities and lifestyle offerings that are known to come with premium prices. 

With that said, let us look at the states in the country that offer the least and most affordable housing options in 2025 and the difference in price over the last year and the last five years so that you can make an informed moving decision. 

Here are the least and most affordable places to live in the country

1. States With The Lowest House Prices 

As of the fourth quarter of 2024, the median home price in the United States was $419,200, which was 0.9% higher than the previous quarter. According to Statista, the median home price is forecasted to reach $426,000 by the second quarter of 2026. 

This year, West Virginia has the cheapest homes in the country, with an average house price of $146,578. These low housing prices can be attributed to the state's rural way of life, low property taxes, and low state income tax, which helps keep land and housing prices affordable. 

All of the states with the lowest house prices are located in the Southern, Southwest, or Midwest regions of the country. Housing is cheaper in these parts of the country because there is more land, lower taxes, and relatively fewer people than in the Northeast or popular areas on the West Coast. 

While the states listed have the most affordable housing prices, these areas may not have the same job opportunities or popular amenities as compared to states with higher prices. 

Whether you are renting or buying a home, moving to an affordable state with low housing costs can save you and your family a lot of money in the long run. If you are moving with kids, consider how much money you will save by moving to a state with lower expenses and if it will be worth relocating. 

2. States With The Most Expensive House Prices 

Hawaii has the highest average house price in the United States at $840,256, which has increased by 1.6% over the past year. Considered the most expensive place to live in the country due to its high cost of living, expensive shipping of goods, and overall limited availability, prices are known to be double in Hawaii than other states on the mainland. 

California is relatively close behind, with an average house price of $784,840. Housing costs here might be the biggest contributor to its notorious high cost of living, but healthcare, taxes, food, gas, and other daily expenses are not far behind. Many celebrities have had to reduce the prices of their homes to find a homebuyer. 

Generally, the closer you are to the ocean in California, the higher the cost of housing. Home to over 39 million residents, California is the most populous state in the country and the third largest by area, meaning it is possible to find affordable housing in less popular cities. 

Los Angeles, San Francisco, San Diego, and San Jose are the most expensive cities in California, with the highest cost of living and the highest house prices. All of these cities are relatively close to the Pacific Ocean and are known for their beautiful weather, top-rated amenities, and excellent job opportunities. The intense competition of people wanting to live in these areas drives home prices higher. 

3. Investment Return 

Return on Investment, or ROI, is a percentage that measures the overall profit earned on a real estate investment after deducting all costs. If you invest in real estate at a young age, the higher the chances of getting a good investment return and the ability to build wealth over time. 

There are many reasons why real estate is a good investment, including steady cash flow, tax breaks, and sustainable appreciation. If you want to increase your chances of earning more money on your real estate investment, buying a house in a state with a higher investment return is ideal.

When thinking about real estate investing, many important factors must be considered, such as property location and valuation. Location continues to be the number one most important factor for profitability in real estate investing since it directly influences property value, demand, and overall desirability. 

According to Nasdaq, certain states in the country are considered the best places to buy property in the next decade due to their increasing populations, favorable weather, great school districts, decent tax breaks, and abundance of job opportunities. 

These top-rated states for purchasing property offer high chances of receiving a favorable ROI, which is a must for any real estate investor or homebuyer. North Carolina, Tennessee, Texas, Georgia, California, Florida, Nebraska, and Nevada are among the best states to invest in for the future and offer hot real estate markets. 

If you want to make a good investment and the most money when purchasing real estate, you must pay attention to real estate ROI trends. Ryan Fitzgerald, Founder of Raleigh Realty, states, "The real estate market is constantly evolving, influenced by various factors including economic conditions, demographic shifts, and consumer preferences."

4. Economic Factors That Influence Housing Affordability

The economy greatly impacts housing affordability, and certain economic factors play a big role in either driving up or lowering housing costs. Considering these factors, people can predict real estate trends and prepare for what's ahead. 

Supply and Demand 

When the demand for housing is high, but supply is limited, prices tend to rise, making homes less affordable. Meanwhile, home sellers may lower their prices if demand is low and supply is high. The law of supply and demand is why house prices are known to be so high in sought-after areas and cities with high populations. 

Mortgage Interest Rates 

The interest rate on a mortgage is the percentage charged on the amount you borrowed to buy a home. When interest rates are low, borrowing costs are more affordable, which leads to less expensive homes and more people looking to buy. 

Employment and Incomes 

A healthy economy means a healthy real estate market. When the job market is strong, and there are more opportunities for people to work and make high wages, the more likely someone will be able to afford a home mortgage in areas that are known for having a high cost of living. 

Government Policies and Programs

The government offers many programs, from first-time homebuyer assistance programs to low-income housing tax credits that can help people obtain mortgages. These policies and programs can help someone achieve their homeowner dreams. 

Methodology 

To determine the states with the lowest and highest housing prices, we found the average housing price per state as of January 2025. 

We also used data and information from the following sources to determine the importance of high return on investment in real estate and common economic factors that influence housing affordability: 

• U.S. Census Bureau 
• Investopedia 
• Bankrate 
• Forbes
• Nasdaq

FAQs 

What state has the cheapest houses in 2025? 

With an average house price of $146,578, West Virginia has the cheapest houses in the country, making it a great place for homeowners looking for affordable options. Due to its lower-than-average cost of living and rural economy, living in West Virginia is a great option if affordability is your number one concern as a homebuyer. 

What is the best month to buy a house? 

Winter is usually the cheapest time of year to buy a home. The months of November and December are the best months to buy a house, specifically if you are looking for lower prices and better deals. There will be less competition and fewer homes to choose from around the holiday season than during the summer months. 

Is 2025 a good time to buy a house? 

The housing market is on the rebound as of the beginning of 2025, which is why it might be a good idea for homebuyers looking for a primary residence to buy a property sooner rather than later. Rates are expected to drop modestly throughout the year, which could be a good motivator for homebuyers. As long as your finances are stable and you buy in a state with favorable real estate conditions, 2025 could be a great time to buy a house. 

The Least and Most Affordable U.S. States - Final Thoughts 

Consider what states offer the highest and lowest prices and investment returns in order to make an informed moving decision. While the market is always fluctuating, 2025 is a great time to buy a home as long as your finances are stable and you decide to purchase in a favorable location. 

While home prices depend on many factors, the current forecast for home prices across the country is on the rise. If you are looking to find your dream home in Raleigh, contact the experts at Raleigh Realty. We are here to help and are prepared to answer your questions.