Michigan Places 23rd in Housing Affordability Decline with 13.65-year Payoff Time

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Article courtesy of FloridaRentals.com.

• Delaware residents now need 17.68 years to pay off median-priced homes, a 7.74% increase from 2022.
• Iowa and South Dakota follow closely with 6.78% and 6.30% increases respectively.
• While most states saw declining affordability, North Dakota showed the greatest improvement with payoff time dropping 4.56%.
• Hawaii remains the least affordable state overall, requiring 35.52 years to pay off a median-priced home.

A new study by vacation rental marketplace FloridaRentals.com has identified the states where housing has become increasingly disconnected from local income levels, with Delaware showing the most significant decline in affordability.

The data analyzed, from 2022 to 2023, shows that payoff times remain high in many states, but the significant variation across regions reveals a complex national housing picture. The analysis calculated how long it would take residents to pay off a median-priced home if dedicating 25% of their income to housing costs.

Michigan’s findings:

Michigan ranks 23rd nationally for the steepest decline in housing affordability between 2022 and 2023, with residents now needing 13.65 years to pay off a median-priced home, a 1.87% increase from the previous year. Median home values climbed to $236,100 in 2023, while household incomes rose to $69,183, growth that was not enough to keep pace with rising property prices.

Although Michigan’s affordability decline is less severe than in states like Delaware, Iowa, and South Dakota, the data highlights a continued squeeze on households across the state. For many prospective buyers, particularly first-time homeowners, the incremental rise in payoff time underscores the challenge of achieving long-term housing stability even as income levels improve.

Top 10 states where housing became less affordable:

According to the findings, Delaware experienced a 7.74% increase in home payoff time from 2022 to 2023. The median home value rose to $359,700, showing a rate of increase greater than household income, which actually declined to $81,361.

Iowa ranked second among states with growing affordability gaps. The Hawkeye State saw a 6.78% increase in the time needed to pay off a median-priced home, now requiring 11.94 years despite rising incomes to $71,433.

South Dakota‘s housing market follows those seen across many Midwestern states, with residents now needing 14.94 years to pay off a median-priced home – a 6.3% increase from 2022. The state’s median home value climbed to $268,200 in 2023.

Georgia experienced the fourth-highest decline in affordability. Peach State residents now need 17.31 years to pay off a median-priced home, representing a 6% increase from the previous year’s figure.

In Alaska, the time required to pay off a median-priced home increased by 4.92% to 16.05 years. The Last Frontier saw income levels decrease from $88,121 to $86,631, contributing to the growing affordability challenge.

North Carolina showed a 4.82% increase in payoff time. Tar Heel State residents now need 17.43 years to pay off a home valued at $308,600, up from 16.63 years in 2022, despite median income growing to $70,804.

Kentucky placed seventh for affordability decline. Bluegrass State residents faced a 4.76% increase in payoff time, now requiring 13.86 years to pay off a median-priced home valued at $211,800.

Ohio ranked eighth, with residents now needing 13 years to pay off a median-priced home – a 4.63% increase from 2022. The state’s median home value rose to $220,200, outpacing incomes of $67,769.

Oklahoma landed in ninth place, with residents requiring 13.43 years to pay off a home, up 4.5% from last year. Median values climbed to $208,600, while incomes grew to $62,138.

Kansas rounded out the top ten with payoff time increasing by 4.26%. Residents now need 12.5 years to pay off a median-priced home valued at $219,800 against incomes of $70,333.

The states where housing became more affordable:

In contrast, several states showed improved housing affordability during the same period. North Dakota ranked first for affordability improvement with a 4.56% decrease in payoff time. Peace Garden State residents now need 12.9 years to pay off a median-priced home, down from 13.51 years in 2022.

Nevada‘s housing market showed the second-largest improvement, with a 3.88% decrease in the time needed to pay off a typical home. The Silver State saw strong income growth to $76,364, helping to offset the rise in median home values to $441,100.

Oregon residents experienced a 3.79% decrease in payoff time. The Beaver State still requires 24.19 years to pay off a median-priced home valued at $484,800, but this represents an improvement from 25.15 years in 2022.

Idaho, once among the nation’s hottest housing markets, showed a 3.75% improvement in affordability. The Gem State’s median home value actually declined slightly to $428,600 from $432,500 in 2022, while median income rose to $74,942.

California, traditionally among America’s least affordable housing markets, saw a 2.83% decrease in payoff time. The Golden State still requires 30.39 years to pay off a median-priced home (second only to Hawaii’s 35.52 years), but this represents an improvement from 31.28 years in 2022.

Commenting on the study, a spokesperson from FloridaRentals.com said, “These results reveal the complex housing affordability picture across America. While most states are seeing housing costs outpace income growth, we’re also observing interesting regional variations. The Northeast and Southeast regions are experiencing some of the sharpest declines in affordability, while several Western states are actually seeing improvements.

“For potential homebuyers, these trends matter. In states where the affordability gap is widening rapidly, many households might find renting remains a more practical option until incomes catch up with housing costs or market corrections occur.”

Methodology:

This study examines annual household income and median owner-occupied home values at both the state and metropolitan levels for 2022 and 2023. By calculating how long it would take to pay off a median-valued home in each area (assuming 25% of income is dedicated to housing costs) and comparing 2023’s payoff times to those in 2022, it identifies which states and metro regions have seen the greatest declines in housing affordability for prospective buyers.

Source: https://data.census.gov/

Full rankings: States by change in housing affordability (2022-2023)

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