Many people are wondering why the average house prices are so high nationwide. It is because inventory is historically low, and so are the rates on mortgage loans. With fewer homes available for purchase, the house prices have gone up, despite the recession and impact of COVID-19. However, people still want to buy homes, but each state varies.
Average House Prices in the U.S.
According to the National Association of Realtors, the median U.S. existing house price for all home types (single-family, townhomes, condominiums, and co-ops) was $284,600 in May 2020, while that number increased to $295,300 in June.
There are many factors that influence the housing market, which makes it challenging to attribute price changes to a single cause. Components that affect home prices and have caused a steady increase:
- Mortgage rates
- Economic recessions
- Local market conditions
- Houses continue to get larger
Buyers able to qualify for these mortgage rates have faced increased competition for houses, with many entering bidding wars in the most desired properties. There are many homeowners who were once planning to sell and are still prepared to do so as soon as the stay-at-home orders end. Some never even took their homes off the market, especially in rural areas less affected by the pandemic.
Average House Prices by State
Zillow has developed a sophisticated algorithm that tries to overcome issues that come with finding an accurate average of homes by state. Although Zillow estimates are not perfect, their methods have been found to be more comprehensive than other methods. It is helpful that they are not limited to data on recent home sales, and they are also able to include data that helps to value homes that haven’t sold in years.
The information below was found by Zillow’s Home Value Index, which is based on “the median estimate valuation for a given geographic area on a given day.” Here are the average home values for each state, starting with the most affordable states to buy a house.
West Virginia: $107,064
South Carolina: $193,491
North Carolina: $210,766
New Mexico: $214,213
South Dakota: $217,215
North Dakota: $236,405
New Hampshire: $303,875
Rhode Island: $312,255
New York: $331,459
New Jersey: $346,368