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America’s Original 13 States Are Among the Most Expensive in the Nation

Nearly 250 years after the original Independence Day, the 13 colonies that became the United States are among the country’s most desirable place to live.

To celebrate the Fourth of July, LendingTree, the nation’s largest online loan marketplace, has taken a look at the states that were present at the birth of the country. Specifically, we analyzed the modern-day states born out of the 13 colonies that declared their independence from Great Britain in 1776.

We sought to highlight some of the key differences between these areas and the rest of the country, and ranked them based on how affordable a median-priced home in both the state and its capital city would be for someone earning the median income for the area.

While there were originally only 13 colonies, it is important to note that this study will end up looking at the 13 states of Connecticut, Delaware, Georgia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Virginia and West Virginia, as well as Washington, D.C. These present-day areas occupy the same land as the original 13 colonies.

Key findings

The weighted average home price in the former 13 colonies is $239,351. This is nearly $27,000 higher than the weighted average home price of $212,635 for the rest of the U.S. It is difficult to pin down exactly why this is the case, but it likely has to do with the fact that the states that have been around since the nation’s inception are still economic and cultural hubs, boasting some of the nation’s largest economies, important landmarks and prestigious universities.  As a result, despite their age, these areas are still attractive places for Americans to live.

Despite their relatively high average home price, median priced homes in each state studied are affordable to those who earn the state’s median income. Of course, a state is home to hundreds of different communities. Therefore, it is important to note that just because the state as a whole might appear affordable, not every town or city within it will be affordable to someone making the state’s median income.

Median priced homes in all but one of the capital cities of the nation’s original states are affordable to median income earners. Boston is the only capital where a median income would not be enough to afford the monthly payment on a median priced home. On the other side of the spectrum, areas like Concord, N.H., and Raleigh, N.C., are very affordable to median income earners.

Washington, D.C., while technically neither a state nor a capital city of one, is one of the few areas featured in our study that is not affordable to median income earners. Median income earners in D.C. would need to come up with an extra $392 a month to be able to comfortably afford a median priced home in the area.

Most affordable states

New Hampshire

Median home value: $244,900

Median salary: $71,305

Likely monthly payment for a median priced home: $980

Affordable monthly payment for a median income earner: $1,664

Monthly payment surplus: $684

Maryland

Median home value: $296,500

Median salary: $78,916

Likely monthly payment for a median priced home: $1,186

Affordable monthly payment for a median income earner: $1,841

Monthly payment surplus: $655

Pennsylvania

Median home value: $170,500

Median salary: $56,951

Likely monthly payment for a median priced home: $682

Affordable monthly payment for a median income earner: $1,329

Monthly payment surplus: $647

Most affordable state capitals

Concord, N.H.

Median home value: $212,600

Median salary: $61,310

Likely monthly payment for a median priced home: $851

Affordable monthly payment for a median income earner: $1,431

Monthly payment surplus: $580

Raleigh, N.C.

Median home value: $225,000

Median salary: $61,505

Likely monthly payment for a median priced home: $900

Affordable monthly payment for a median income earner: $1,435

Monthly payment surplus: $535

Harrisburg, Pa.

Median home value: $82,100

Median salary: $35,300

Likely monthly payment for a median priced home: $329

Affordable monthly payment for a median income earner: $824

Monthly payment surplus: $495

If you’re feeling priced out of the market, there are ways to help make homeownership a reality

Most of the states and capitals featured in our study appear affordable to someone making the median income in the area. But affordability is not guaranteed to everyone. In fact, there are many obstacles that could prevent someone from buying a home, regardless of their income  — from poor credit to low savings for a down payment.

Fortunately, there are several programs that people can take advantage of to help make homebuying a more achievable goal. For example, there are first-time homebuyer options from the federal government, as well as programs from Fannie Mae and Freddie Mac like the HomeReady® and Home Possible® loans. There are also numerous state- and city-level programs that can help homeowners from a specific area. Beyond that, simply shopping around for a mortgage can help buyers get better deals on loans and ultimately save money when they purchase their home.

Methodology

When determining whether or not a home is affordable, we assume that a median income earner would be able to afford a 20% down payment on the medium home value in their area, and that they will receive a mortgage loan with a rate of 4.39% (the average rate offered to Americans). By using that data, we calculated the likely monthly payment and down payment for a median-priced home in a given state and/or capital city.

We calculate an “affordable” monthly mortgage payment based on the “28% rule,” which says that a person should not spend more than 28% of their yearly gross salary on yearly costs related to housing. This rule, while not necessarily applicable to everyone, is useful for homebuyers to keep in mind as it helps to ensure that they are not overspending on their home and leaving too little money for other expenses.

By subtracting the monthly housing payment that is affordable to a median income earner from the calculated housing payment that would be required to purchase a home valued at the median level, we are able to determine whether or not the average person can afford to purchase a home in the state/city they live in.

To calculate the average home price for the area that occupies the land of the original 13 colonies, we used the number of housing units in the area as a weight.

The data on median home values used in this study comes from the 2017 American Community Survey.

 


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