Which State Is Most ‘House Rich’? The Answer Might Surprise You
Rightly or wrongly, one of the gauges of financial success in the United States is home ownership. Most financial experts preach the gospel of buying rather than renting a home because buying lets you build equity in an asset through monthly mortgage payments. That’s one reason there are so many government incentives for home ownership — and why such a high value is put on communities where large percentages of the population own a home.
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That metric can extend to states as well, as demonstrated by recent research conducted by All Star Home, a Raleigh, North Carolina-based provider of home improvement services. In October, All Star Home put together a study of which states are the most “house-rich” based on metrics such as affordability and percentage of home ownership. The study sourced the most recent data from the U.S. Census Bureau.
For All Star Home’s purposes, being “house rich” is defined by areas that have a low home-value-to-income ratio and high rate of owner-occupied housing. Researchers gave each state a “House Rich Score,” with the lowest score being the best.
So Which State Ranks First in Being ‘House Rich’?
According to All Star Home’s calculations, the winner is West Virginia. The Mountain State had a “house rich” score of 0.6607, putting it just ahead of Iowa and Michigan. This is likely welcome news for residents of West Virginia, which may not always top the lists of state-by-state comparisons.
For example, West Virginia ranks 49th out of the 50 states in real per capita GDP, according to data from Statista. It ranks fourth from the bottom in quality of life “due to poor infrastructure and low economic opportunity,” according to the World Population Review.
On the bright side, West Virginia is affordable compared with most of the rest of the country. Rankings compiled by U.S. News & World Report rated West Virginia fifth in the country in affordability, second in housing affordability and ninth in cost of living.
In All Star Home’s “house rich” rankings, West Virginia benefited from both affordability and high owner-occupancy rates. It also got a boost from its geographic location straddling the South and Midwest, as both of those regions tend to score high in this category.
Here’s a look at the Top 10 states for being house rich, according to All Star Home:
West Virginia: 0.6607 (House Rich Score)
Iowa: 0.6975
Michigan: 0.7570
Indiana: 0.7702
Mississippi: 0.8422
Kansas: 0.8531
Ohio: 0.8623
Nebraska: 0.8673
Alabama: 0.8750
Minnesota: 0.8919
It will likely come as no surprise that many of the states that rank near the bottom for being house rich are located in expensive coastal areas, where home prices rank among the highest in the country. Here’s a look at the Bottom 10:
California: 3.0331
Hawaii: 2.9341
New York: 2.0665
Nevada: 2.0295
Oregon: 1.9019
Massachusetts: 1.7937
Washington: 1.7564
Colorado: 1.6805
Rhode Island: 1.4809
New Jersey: 1.4354
And in case you’re wondering: The two states that landed in the middle are Louisiana (1.0816) and New Mexico (1.0879).
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This article originally appeared on GOBankingRates.com: Which State Is Most ‘House Rich’? The Answer Might Surprise You