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Peak Affordability: Ranking the States With the Most Affordable Mortgage Payments

A new study from SelfStorage.com has revealed the states spending the smallest portion of their income on home payments throughout the U.S.

The research by SelfStorage.com analyzed the average home values, loan amounts, and incomes in each state to establish the average monthly mortgage payments nationwide.

The study found that West Virginia was the state in which mortgage payments are on average, the most affordable. With an average home value in the state of approximately $158,000, after an ordinary (17%) down payment, the average West Virginian loan amount comes in around $131,000. On a common 30-year, 7% fixed-rate mortgage, the average monthly payment in the state is just $873.27.

With the average income in West Virginia at a monthly $4,270, mortgage payments here equate to 20.45% of a resident’s monthly earnings, the lowest proportion in the country.

Iowa ranked as the state with the second most affordable payments, with the average home value of $216,000 makes for an average loan amount of $180,000. An average monthly income of $5,466 in the state, and an average monthly payment of $1,194 mean that Iowan mortgage holders spend 21.84% of earnings per month on these home payments.

Ranking third in SelfStorage’s study, Kansas mortgage holders have an average monthly mortgage payment of $1,212. This comes in as 22.69% of the average monthly income in the state, which sits at $5,344. The state boasts a typical home value of $220,000, making for an average loan value of $182,000.

“With mortgage holders subject to the current cost of living in other areas, it’s interesting to learn the states whose mortgage constitute the smallest burden,” said Chuck Gordon, CEO of SelfStorage.com. “These results are also of course incredibly useful to those wishing to buy property and take out mortgages, potentially even influencing some to move across state lines to find the best place to make a home.”

With the nationwide average monthly payment coming in at $2,036, and nationwide monthly earnings of $5,770.23 the average percentage of income spent on mortgage payments comes in at 35%. These top three states have mortgage costs far below this figure.

Ohio and Illinois rank as the states with the fourth and fifth most affordable mortgage payments nationwide. The average loan amount in Ohio of $183,000 makes for an average monthly payment of $1,214, this is 23.41% of the average Ohioan monthly income of $5,188. Meanwhile, an average loan of $212,000 in Illinois, requires a monthly payment of $1,411, meaning an average spend of 23.46% of the average monthly income of $6,017.

Kentucky and Oklahoma follow with the sixth and seventh most affordable mortgage payments. Relatively low typical loan amounts in these states of approximately $165,000 make for an average monthly payment on a 30-year, fixed-term mortgage of around $1,100. In Kentucky, this payment equates to 23.56% of the average monthly income while in Oklahoma it equates to 23.68%.

Mississippi comes in with the eighth most affordable monthly mortgage payment. The relatively low average monthly payment of $975 equates to just 24.03% of an average monthly income of $4,060.

The final two of the top 10 most affordable states are Michigan and Indiana. Average loan values close to $195,000 in both of these states make for monthly payments of approximately $1,400. This payment in Michigan equates to 24.54% of the average monthly income, while in Indiana it is 24.66%.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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