WalletHub, the personal finance website, released a report on “States Where People Spend the Most & Least on Housing.” The report looked at mortgage and home energy payments in each state along with household income to analyze where people are spending the greatest percentage of income on housing.
In terms of home-ownership, Washington state ranked 5th overall in terms of highest cost of housing as a share of median monthly household income. Hawaii was the most expensive, followed by California, Oregon, Nevada, and then Washington. Iowa was the least expensive on the list for home ownership.
In terms of the states where renters spend the most and least on housing, Washington state was 18th. New York was the most expensive and Kansas was the least expensive overall for renters.
WalletHub also included 5 tips for saving costs on housing:
- Get a shorter mortgage: You can save a staggering amount of money on interest just by taking out a 15-year mortgage rather than a 30-year mortgage. Naturally, your monthly payments will be much higher, but if you can afford it, your wallet will thank you in the long run.
- Improve your budgeting skills: Learning how to budget properly is essential for making sure you have enough money to afford your monthly housing bills on top of all your other expenses. If you haven’t bought a house yet but plan to in the future, you should strive to budget money each month toward a down payment, after putting money toward your basic needs and paying down existing debt.
- Make a large down payment: The larger your down payment is, the less interest you’ll pay over the course of your mortgage, and the better interest rates you may receive. Plus, making a down payment of at least 20% of the property’s price will prevent you from having to purchase private mortgage insurance.
- Minimize your use of utilities: Utilities won’t be as big of a cost as your mortgage, but they still add up quickly. Taking shorter showers, lowering your thermostat by a few degrees during the winter, raising it by a few during the summer, turning lights off when they’re not necessary and doing other things to minimize your use of utilities can save you a lot in the longterm.
- Improve your credit before buying: The better your credit score is, the better your interest rate on a mortgage is likely to be. The best ways to improve your credit score include making on-time payments on your existing debts, keeping your credit utilization low and checking your credit report for errors.
To view the full report, methodology and related charts, visit the following WalletHub link: States Where People Spend the Most and Least on Housing.
