The 10 Most Expensive States to Live In and Buy a Home in 2026

Buying a home in the U.S. now takes a much bigger slice of income than it did before the pandemic. Home prices have climbed sharply, mortgage rates remain far above recent lows, and many buyers are trying to make the math work in markets where listings are still scarce.

According to Redfin data referenced in the brief, the average homebuyer needs to spend nearly 40% of income on housing today. In the most expensive states, that figure is even higher. California, Montana, and New York top the list, with typical monthly housing payments taking close to half of a local homebuyer’s income.

High-cost housing markets often share the same pressure points, limited land, strong demand, and high prices.

Why housing affordability is still under pressure

The pandemic-era housing boom changed the baseline for many buyers. Home prices rose by more than 50%, while mortgage rates nearly doubled from their lows. That combination pushed monthly payments higher even in places where incomes also grew.

The result is a market that feels stuck. Many would-be sellers are holding on to lower mortgage rates. Buyers face fewer choices and higher payments. Renters often stay put longer because buying requires more cash, more income, and more patience.

The affordability strain has also shaped migration. Many households have looked toward the Sun Belt, Midwest, and smaller Northeast markets in search of lower costs. At the same time, several coastal and mountain states remain expensive because demand has stayed strong and inventory has not kept up.

For this analysis, a state is considered unaffordable when the median housing payment requires more than 35% of the median household income. That is higher than the long-used 30% affordability guideline, but it reflects how stretched the current market has become.

The 10 most expensive states in 2026

The table below ranks the states where buying a typical home takes the largest share of a local household’s income. These are the 10 most expensive states to live in and buy a home in 2026 based on the share of income needed to afford a typical home.

Rank	State	Share of income required	Median household income	Median sale price
1	California	52.4%	$107,551	$777,566
2	Montana	47.7%	$78,675	$527,848
3	New York	47.3%	$93,285	$553,268
4	Hawaii	47.1%	$108,925	$747,660
5	Massachusetts	45.9%	$112,800	$687,847
6	New Jersey	44.9%	$112,362	$587,128
7	Rhode Island	42.9%	$95,262	$538,315
8	Washington	42.5%	$106,486	$617,990
9	Oregon	42.5%	$90,070	$521,368
10	Idaho	41.3%	$84,416	$498,340

California stands apart at the top. A typical local homebuyer would need to spend 52.4% of household income on housing payments. That is far above the traditional 30% benchmark and well above the 35% unaffordability threshold used here.

Montana’s place near the top may surprise some buyers. It does not have the same giant coastal metro areas as California or New York, but prices have risen as demand for scenic, lower-density living pushed into mountain markets. The state’s median household income is also lower than several other states on the list, which makes the payment burden heavier.

New York, Hawaii, and Massachusetts round out the top five. Each has a different housing story, but they share a core problem: desirable locations, limited supply in high-demand areas, and sale prices that remain difficult for local buyers to absorb.

Mountain states can become expensive when demand rises faster than local incomes.

What these states have in common

Most of the priciest states fall into one of two groups.

The first group includes coastal states with long-running supply issues. California, New York, Massachusetts, New Jersey, Rhode Island, Washington, and Oregon all fit that pattern. Many of their most desirable markets have limited land, zoning constraints, strong job centers, or a mix of all three.

The second group includes destination and lifestyle markets. Hawaii, Montana, and Idaho have drawn buyers because of natural beauty, outdoor access, or quality-of-life appeal. In many of those communities, local wages have struggled to keep pace with home values.

A high median income does not always solve the problem. Hawaii, Massachusetts, New Jersey, Washington, and California all show median household incomes above $100,000. Yet their housing costs are so high that buyers still face payment shares above 40%.

That is the key affordability lesson. Income matters, but price growth and borrowing costs can outrun it.

The affordability gap reaches far beyond the top 10

The top 10 states show the most severe pressure, but they are not the only places where buying is difficult.

Across all 50 states, nearly half, 22 states, require locals to spend at least 35% of income on housing. Another 15 states fall between 30% and 35%. That second group includes states such as Arkansas at 30%, Pennsylvania at 31%, and Wisconsin at 33.2%.

The old 30% housing rule is still useful, but many buyers now live in markets where staying below it is not realistic.

This helps explain why the housing market has been slow. Buyers are cautious because payments are high. Sellers are cautious because moving often means giving up a lower mortgage rate. That keeps inventory tight in many places, which limits how much prices can soften.

Migration decisions often start with the monthly payment, not just the sale price.

What buyers should watch in expensive states

A high state ranking does not mean every city or town is equally expensive. A buyer in upstate New York faces a different market than one in New York City. The same is true for inland California compared with coastal metros, or rural Oregon compared with Portland-area suburbs.

When comparing states, focus on the full housing payment, not just the list price. That includes:

• Mortgage principal and interest

• Property taxes

• Homeowners insurance

• HOA fees when they apply

• Maintenance and repair costs

• Local transportation costs

  
  

The monthly payment also changes quickly when mortgage rates move. A small rate shift can add or subtract hundreds of dollars from the cost of a typical home. That is why affordability can improve even if prices do not fall much, and why it can worsen even when prices flatten.

For renters thinking about buying, the gap between rent and ownership costs may still be wide in these states. In expensive markets, renting can remain the more flexible option while saving for a down payment or waiting for better inventory.

Even within costly states, affordability can change sharply from one county to the next.

The main takeaway for 2026

The most expensive housing markets in 2026 are expensive for more than one reason. Some have global cities and high-paying job centers. Others have limited land, scenic appeal, or fast-growing demand from buyers relocating from pricier metros.

California, Montana, and New York now sit at the top, with typical housing payments consuming nearly half, or more, of local household income. Hawaii and Massachusetts are close behind.

Affordability is slowly improving in some places, but the pressure remains broad. For buyers, the smartest move is to compare markets by monthly payment and income fit, not by home price alone. In 2026, the real question is not only where homes cost the most. It is where the numbers still leave room to live.