Research Report
States With Highest Housing Costs 2026
Last updated: June 2026 — 4 data sources
Key Takeaways
- California has the highest housing costs (index 180), followed by New York (165) and Washington (145).
- Home price-to-income ratios exceed 10x in expensive states, compared to 3.5-5x in affordable states.
- Property tax rates can partially offset or compound high home prices.
- Use our mortgage calculator to evaluate home affordability in any state.
Key Findings
- California has the highest housing cost index at 180, nearly double the national average.
- California's median home value of $750,000 is over 10x the average annual salary of $73,220.
- New York has a housing index of 165, with a median home value of $370,000.
- Home price-to-income ratios in expensive states exceed 10x, compared to 3.5-5x in affordable states.
- High housing costs drive overall cost of living differences between states.
Highest Housing Cost States Overview
Housing costs vary more dramatically than any other expense category across US states. California leads with a housing cost index of 180 (80% above national average), followed by New York at 165 and Washington at 145. These states have seen significant home price appreciation driven by strong job markets, limited housing supply, and high demand.
The median home value in California is $750,000, requiring an annual income of approximately $150,000 to afford a median-priced home using the 28% rule. This creates significant affordability challenges even for households earning above-average salaries.
Home Price-to-Income Ratios
The home price-to-income ratio measures how many years of average salary are needed to buy a median-priced home. In California, this ratio exceeds 10x, meaning a household earning the average salary would need over 10 years of pre-tax income to purchase a median-priced home. In contrast, Ohio's ratio is approximately 3.6x.
This metric is crucial for understanding housing affordability. A high ratio indicates that homeownership is out of reach for many residents earning average wages, which can affect decisions about where to live and work.
Impact of Property Taxes on Housing Costs
Property taxes add a significant ongoing cost to homeownership. While California's effective property tax rate (0.71%) is relatively low due to Proposition 13, the high home values still result in substantial property tax bills. Texas has a much higher property tax rate (1.60%) but lower home prices ($310,000 median).
Our mortgage calculator accounts for property taxes when estimating monthly payments, providing a complete picture of housing affordability in each state.
Methodology
States are ranked by housing cost index from the Council for Community and Economic Research Cost of Living Index and median home values from the Zillow Home Value Index. Additional context includes home price-to-income ratios, property tax rates, and estimated monthly mortgage payments (assuming 20% down, 30-year fixed at 6.5%).
Sources
- Zillow Home Value Index
- Council for Community and Economic Research - Cost of Living Index
- US Census Bureau - American Community Survey
- Bureau of Labor Statistics
Frequently Asked Questions
Which state has the highest housing costs?
California has the highest housing costs with a housing index of 180, median home value of $750,000, and home price-to-income ratio over 10x. New York (index 165) and Washington (index 145) are the next most expensive.
How do high housing costs affect affordability?
High housing costs consume a larger portion of household income, leaving less for savings, investments, and discretionary spending. In expensive states, even above-average salaries may not provide comfortable homeownership options. Our mortgage calculator helps evaluate affordability.
Related Pages
Official Sources
Canada calculators use data from the following official government agencies:
- Canada Revenue Agency (CRA) — Federal and provincial income tax rates, CPP contributions, and RRSP limits.
- Statistics Canada — Employment data, income statistics, and housing market data.
- Bank of Canada — Interest rates, inflation data, and mortgage rate benchmarks.
Methodology
Our Canadian calculators use federal and provincial tax brackets, CPP/QPP contribution rates, and EI premiums published by the Canada Revenue Agency (CRA). Economic data is sourced from Statistics Canada. Mortgage calculations use Bank of Canada rates and market averages. All figures are for educational purposes.
Data Sources
All tax brackets, contribution rates, and economic data used in our calculators are sourced from the official government publications listed above. Rates are updated at least annually to reflect the latest tax year and regulatory changes. Users should verify critical figures with official sources or qualified professionals.
Last updated: June 2026. Information may change; always verify with official sources.
Last Updated: June 2026 — Reviewed Against Official Sources