Here's What You Need To Make To Afford A Starter Home In MI: Report

MICHIGAN — While home prices continue to climb across the nation, Michigan is one of the more affordable places for a starter home, according to a new Realtor report.

The report found the average income needed to afford a typical starter home across the nation in 2024 was $70,164, which is up more than 100 percent from $32,357 in 2019.

Home prices have also surged during those years, going from an average of $190,559 in 2019 to $292,950 in 2024, according to the report.

Additionally, mortgages rates have jumped from roughly 4 percent to nearly 7 percent during that same timeframe, meaning young families and first-time home buyers need to have higher incomes to afford mortgage payments, according to the report.

"Though home price growth has contributed significantly to declining affordability, mortgage rate growth has exacerbated the issue," Realtor.com Senior Economic Research Analyst Hannah Jones said. "Falling mortgage rates are crucial to improved housing affordability."

The new report defines a starter home as a home priced at the 25th percentile price for an area across 2024. The estimated payment for 2024 assumes a 7 percent mortgage rate with a 10 percent down payment.

In Michigan, the report found a typical starter home sells for roughly $150,790. That would require a monthly payment of $903 and an income of $36,116.

The report does note that the average price in Michigan has increased 33 percent from 2019, jumping the monthly payment needed by 87 percent. Despite this, Michigan is still one of the more affordable places across the nation.

Moreover, the report found Michigan among the five states with the lowest minimum income to afford a starter home:

1. West Virginia: $31,653
2. Michigan: $36,116
3. Illinois: $38,369
4. Ohio: $39,416
5. Kansas: $40,930

On the other hand, the most expensive place for a typical starter home is Hawaii, with a $698,090 average price. That would require roughly $4,100 per month and an income of at least $167,000 to afford a home.

The state that has seen the largest increase in starter home prices is New Hampshire, where prices jumped 164 percent since 2019. The average monthly mortgage payment would be roughly $2,600, with a 10 percent down payment. The average income needed would have to be $103,985 to be considered affordable.

Click here to see the full report