The Worst and Best States to Be a Homeowner in 2017

Since buying a home is one of the biggest investments of your life, it's ideal to buy within a state where housing is relatively affordable and the value of your home is likely to appreciate strongly over time. It's also desirable to avoid paying more than you can manage in ongoing costs, from taxes to insurance to damage from major storms. Finally, it's best, of course, if the state where you're buying boasts low rates of property crime, good schools, and a healthy proportion of homeowners compared with renters. We rolled together ten key metrics that quantify those factors, and ranked states on how successfully (or not) they offer the optimal factors for home ownership while skirting the attributes you'd want to avoid.

The Worst States to Be a Homeowner

RankStateHomeowner Score (out of 100)

1

Louisiana20.97

2

Mississippi29.32

3

Tennessee29.59

4

New Mexico34.69

5

Alabama35.04

6

Missouri36.64

7

Texas39.21

8

New Jersey39.54

9

California39.97

10

Georgia41.53

The worst states to be a homeowner have some combination of a weak housing market, a heavy burden of costs to maintain a home, and a propensity for calamity and crime. The three worst states are in the south, and specifically from the Gulf region, where yearly storms batter homes and can cause millions of dollars in property damage.

The Best States to Be a Homeowner

RankStateHomeowner Score (out of 100)

1

Iowa82.60

2

South Dakota81.38

3

Wyoming79.49

4

Nebraska78.17

5

Maine77.44

6

Minnesota75.37

7

West Virginia76.03

8

Michigan75.74

9

New Hampshire72.28

10

Wisconsin71.25

The best states to own a home generally are less urban overall, with a higher proportion of homes in rural areas, where costs and crime can be lower. Our highest-ranked state for homeownership is Iowa, where it's very affordable to own a home. With low insurance rates, low mortgage rates, and few calamities that cause insurance claims, South Dakota is another notably inexpensive state in which to own a home.

RankStateHousing Market Score (/40)Ongoing Affordability Score (/35)Living Factors Score (/25)Total Homeowner Score (/100)
46Alabama16.610.817.6335.04
18Alaska26.2725.799.161.16
17Arizona32.223.885.1261.2
35Arkansas18.7820.555.8545.18
42California30.641.148.1939.97
15Colorado35.6315.6612.7664.05
30Connecticut22.845.0419.6147.49
24Delaware17.2221.917.8356.95
39Florida35.0116.7242.73
41Georgia24.413.753.3841.53
27Hawaii29.715.957.9153.56
19Idaho11.333.0216.7561.06
26Illinois28.7712.1214.8955.78
33Indiana12.2320.1614.0846.47
1Iowa36.5726.3619.6782.6
36Kansas17.8518.648.6545.14
13Kentucky25.3424.9415.9966.27
50Louisiana8.4911.341.1520.98
5Maine25.0227.8524.5777.44
31Maryland24.0912.0511.0947.22
32Massachusetts30.026.4210.0846.52
8Michigan35.3222.1118.3175.74
6Minnesota4016.0920.2876.37
49Mississippi11.311.316.7229.32
45Missouri11.315.959.436.64
14Montana16.9130.0417.2764.23
4Nebraska39.0624.7314.3778.17
23Nevada30.3326.57157.9
9New Hampshire28.1419.132572.28
43New Jersey20.036.4213.0939.54
47New Mexico127.995.6834.67
34New York23.469.9612.9346.35
40North Carolina24.0912.94.941.89
12North Dakota32.8223.5610.8867.27
29Ohio22.5321.128.4152.06
25Oklahoma29.0817.5410.1456.76
16Oregon32.5124.166.7463.41
20Pennsylvania20.3419.1719.1158.62
37Rhode Island31.586.566.0744.21
28South Carolina24.419.069.9253.38
2South Dakota28.143518.2481.38
48Tennessee6.6215.737.2429.59
44Texas25.3410.423.4539.21
11Utah19.7228.3420.9969.05
38Vermont7.5513.2223.0743.84
22Virginia20.6619.7417.6158
21Washington32.223.522.8458.56
7West Virginia23.7832.0220.2376.03
10Wisconsin27.5224.731971.25
3Wyoming22.5334.8622.179.49

New Mexico: A Tough Housing Market

Though not among the worst states overall, New Mexico was the worst-ranked state for the overall health of its housing market. The Land of Enchantment hardly lived up to that description when it came to affordability;  the state's median home value is high when compared with its median income. The value per square foot of home was also fairly weak, and New Mexico also didn't fare well on the percentage of homes in the past year that had gained in value when they were sold.

Best States for Market Quality

Rank

StateMarket Quality (Out of 40)

1

Minnesota40.00

2

Nebraska39.06

3

Iowa36.57

4

Colorado35.63

5

Michigan35.32

Worst States for Market Quality

RankStateMarket Quality (Out of 40)

50

New Mexico1.00

49

Tennessee6.61

48

Vermont7.55

47

Louisiana8.49

46

Idaho11.30

Florida: Most Expensive State for Ongoing Affordability

Florida is an expensive state to maintain a home. The Sunshine state ranked last in terms of annual homeowners insurance rates, and third to last in terms of property damage caused by storms per square meter. Mortgage rates also tend to be on the high side in Florida, 41st highest to be exact. The ratio of the median income of the state to the median cost to the maintain the home (which includes property taxes) also showed that it may be hard for average homeowners to maintain their home, while also having a healthy financial situation.

Best States for Ongoing Affordability

RankStateAffordability Score (Out of 35)
1South Dakota35.00
2Wyoming34.86
3Idaho33.02
4West Virginia32.03
5Montana30.04

Worst States for Ongoing Affordability

RankStateAffordability Score (Out of 35)
50Florida1.00
49California1.14
48Connecticut5.04
47New Jersey6.42
46Massachusetts6.42

New Hampshire: A Great Place for Schools and Low Crime

New Hampshire was the highest ranked state when it came to livability. New Hampshire had a well rated school system, low burglary rates, and a had the 7th highest homeowner to renter ratio of any state. Nevada was less ideal for owners, where burglary rates were the 6th highest of any state. Nevada was also the third to last ranked state for its homeowners to renters ratio behind New York and California.

Best States for Livability

RankStateLivability Score (Out of 25)

1

New Hampshire25.00

2

Maine24.57

3

Vermont23.07

4

Wyoming22.10

5

Utah20.99

Worst States for Livability

RankStateLivability Score (Out of 25)

50

Nevada1.00

49

Louisiana1.15

48

Washington2.84

47

Georgia3.38

46

Texas3.45

Methodology

To arrive at the homeowner score, we looked at 10 factors and divided them into three categories: Market Quality considers how affordable it is to buy (the ratio of the median house value to the median income) and appreciation (the percent of homes that sold for an increase), along with the state's foreclosure rate and median value per square foot of homes. Ongoing Affordability considers the average cost of homeowners' insurance in the state, mortgage rates, the ratio of the median cost to maintain the home to the median income for the state, and the damage per square mile done in the state by storms in the last 60 years. Lastly, Livability considers the burglary rate in a state, the ratio of homeowners to renters, and the quality of schools.

We then averaged within each category how each state ranked for each metric. We then normalized each average score within each category to add up to 100 for a homeowner score. The housing strength metric was given a total score of 40, with the best state scoring 40 points and the worst state scoring 1 point. We did the same with the residual costs metric except out of 35, and the living factors metric out of 25.

Housing Market Strength

We got the ratio of median income to median house value from the Census.gov American Fact Finder 2015 survey where we found the income stat in its economic survey and the home value in its housing survey. We divided the two values to get this metric. Next, we got the foreclosure rate, percent of homes that sold for an increase and the median value per square foot of home from Zillow.com in their open data section.

Residual Costs

We got the insurance data from our own research as seen here on our average cost of homeowners insurance study. We next got the ratio of the cost to maintain the home and the median income of the state from the census.gov American Fact Finder survey. We got mortgage rates by state from Bankrate.com, where we averaged the rate for 15 and 30 year mortgages. Lastly we got the damage from storms per square mile from the NOAA Storm Database where storms have been measured between 1950 and 2011. The database tracks how much damage storms cause in each state. We took that amount and divided it by the square mile area of the state which is provided in base Rstudio.

Living Factors

We got the burglary rate data from the FBI crime database. We got the school quality data from a US News and World Report. Lastly, we got the ratio of homeowners to renters from the census.gov American Fact Finder 2015 survey.

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