Since pandemic, Montana, Idaho have surpassed California as most unaffordable states for homebuyers

At 43, Sharon Reese is a housing market refugee — forced to return to her Ohio hometown after 18 years in Las Vegas, despite a successful career training dancers for nightclub acts.

“If you don’t have between $600,000 and $800,000, you’re not buying a house out there,” Reese said. “Las Vegas has a lot of opportunity, and it was affordable in 2006, but it’s become unaffordable. We quit our jobs and moved across the country. We’re hoping this is the right decision for us.”

Reese and her family are unpacking at her parents’ Youngstown home, a temporary stop until she and her husband, who was a casino worker in Las Vegas, can find jobs and a house of their own with their young daughter. Youngstown is one of the last two metro areas in the country where a household with nearly any income should be able to find a single-family home they can afford to buy, according to an analysis of April data by the National Association of Realtors.

Before the pandemic, there were 20 states that were considered affordable as a whole under the group’s definition, including the presidential election swing states of Michigan, Pennsylvania and Wisconsin. As of this year, there is none. Even the states with the closest match between income and home prices — Iowa, West Virginia, Ohio, Indiana and Michigan — didn’t make the cut.

Since the pandemic, two states, Montana and Idaho, have surpassed California as the most unaffordable states for local homebuyers, according to the analysis. Hawaii and Oregon round out the list of the five least affordable states.

The Realtors’ analysis assigns affordability scores to states and large metro areas on a scale of 0 to 2. A score of 0 means that no household can afford any home on the market.

A score of 1 means that homes on the market are affordable to households in proportion to their position on the income ladder — in other words, 100% of families can afford at least some homes on the market. And a score of 2 would mean that all households can afford all homes on the market, but no state or metropolitan area even reached a 1.

The least affordable metro area was Los Angeles, which scored only 0.3, while the metro areas of Youngstown (0.97) and Akron (0.95) in Ohio were rated most affordable.

According to the latest estimates from July by real estate company Redfin, median single-family home sale prices were $175,000 in Youngstown and $239,500 in Akron. That compared with $487,000 in Las Vegas, $490,000 in Boise and $1 million in the Los Angeles area. 

The Las Vegas area, where the Reese family had lived for 18 years, had a score of 0.5 on the Realtors’ scale. No state earned an overall score of 1, though Iowa, West Virginia and Ohio came close, at nearly 0.9. The least affordable states, Montana, Idaho, California, Hawaii and Oregon, all had scores around 0.4.

Nationwide, home affordability has evaporated over the past three years as interest rates have gone up, according to a monitoring index maintained by the Federal Reserve Bank of Atlanta. It measures affordability more simply than the Realtors’ analysis, focusing solely on the ability of a homebuyer with the median household income to buy the median-priced house.

By that measure, the national affordability percentage was above 100% between January 2019 and April 2021. But it fell as low as 67% last year and remained below 70% in June, meaning a homebuyer with the median income had only two-thirds of the earnings needed to buy the median-priced house.

Home prices have increased by nearly 50% since 2020, Harvard study finds

Home prices have increased by 47% nationwide just since 2020, according to a June report by the Harvard Joint Center for Housing Studies. A major factor is that there aren’t many homes for sale: Many current homeowners are reluctant to sell because they’re locked into historically low interest rates. Meanwhile, investors have gobbled up single-family starter homes, reducing the supply.

Lawrence Yun, chief economist for the National Association of Realtors, said there are signs of more houses coming up for sale. For example, there was a 20% increase in houses and condos for sale in July compared with July 2023, according to the association.

“We are still short on inventory, but I think the worst is over,” Yun said. “We have seen mortgage rates begin to decline, so it’s less of a big financial penalty to move and give up a low interest rate. And the second factor is just the passage of time — life-changing events always occur, a death, a divorce, a new child or just job relocation, and that means changing residence.”

Along with high prices and interest rates, home buyers are getting slammed by higher property taxes and insurance costs, according to the Harvard Joint Center for Housing Studies.

Home prices in northeast Ohio might be lower because the area has a stable population, curbing competition and bidding wars, said Alison Goebel, executive director of the Greater Ohio Policy Center, a Columbus nonprofit aimed at revitalizing Ohio cities.

“Our population numbers have remained fairly steady in the last several decades, so we don’t have egregious demand and supply issues like you see on the West Coast and other rapidly growing areas," Goebel said.

Housing prices, rent soar in 'Zoom boom towns' like Boise, Bozeman

Montana and Idaho are the least affordable states: Housing prices are exploding in both, as deep-pocketed newcomers — many of them white-collar employees working in high-wage jobs based out of state — have driven up prices beyond what longtime residents can afford.

The city of Boise scored 0.4 on the Realtors’ affordability scale, on par with the New York City area. Like Montana, Idaho has natural beauty that is attracting people who are cashing out of more expensive areas, said Nicki Hellenkamp, Boise’s director of housing and homelessness policy.

“It’s one of the Zoom boom towns, where it’s beautiful but the wages are low, and the cost of living is low. If you sell your house in Los Angeles and buy two houses here, as my uncle did, then you can have a very different standard of living,” Hellenkamp said.

It’s not just home prices — rents are up 40% in Boise since the pandemic began, she added.

“Obviously wages didn’t go up 40%, so some people have been displaced,” Hellenkamp said.

The city is working on modest proposals to help with down payments and to create more affordable apartments, she said, but building more affordable housing will mean state and federal cooperation to help solve labor shortages and soaring material costs.

“We can’t do this alone as a city. This issue is a big one,” Hellenkamp said.

A state housing task force in Montana made recommendations in June to streamline construction of houses and apartments statewide and create incentives for cities to loosen zoning and allow denser housing.

A member of the task force, Kendall Cotton, said he personally found it impossible to buy a house in Montana, but was happy to recently purchase half a duplex for his growing family.

“We were thrilled to have that as an option, just to get our foot in the door and start on our journey to homeownership,” Cotton said. “Montana is an in-demand place. We’ve been kind of discovered in the last couple of years.”

Republicans and Democrats have come together to support fighting restrictive zoning, said Cotton, director of the Frontier Institute, a nonprofit policy and educational organization.

“We’re a free-market organization that tends to lead from right of center, but when I was at the governor’s press conference to support these issues, I was standing shoulder to shoulder with a Democratic socialist city council member and we were all united on this,” Cotton said.

Shallon Lester, a YouTube influencer who moved from New York to Montana and paid $1 million for a five-bedroom house in Bozeman in 2022, said she likes the lower cost of living and the lifestyle there. Locals tend to think she’s an outsider “invading” the area, she said, but “people like me take nothing from this economy — we only give. We spend and spend.”

“People who are remote workers are sick of the cost of living in cities,” Lester added. “There’s a mass return to the concept of the simple life.”

Even in the Youngstown metro area, which includes a slice of Pennsylvania, housing can be a challenge for residents with low incomes. A forthcoming regional housing study has found a 4,000-unit shortage for households making less than $25,000 a year; 7,500 people are on a waiting list for subsidized housing. Black and Hispanic residents are more likely to struggle with housing costs, as are older people, young singles and families with young children, according to  preliminary conclusions discussed in April.

But for many, Youngstown is a rare island of affordability. Jim Johnston, 40, a digital account executive at media company Nexstar in Youngstown, said many of his high school classmates from the area, who now live in places such as Montana, Illinois and Maryland, envy his decision to stay there and buy a $250,000 house in 2022 when interest rates were lower.

“One of them has a mortgage payment three times mine for the same size house, and a child care bill that’s bigger than my mortgage,” said Johnston. “They could put an extra $50,000 or $60,000 a year in their pockets. Remote work has opened up new possibilities for them, and they’re considering this very seriously.”

Stateline, like the Idaho Capital Sun, is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org. Follow Stateline on Facebook and X.