It’s no secret that the demand for housing differs greatly depending on where you’re in the USA. With the price of a one-bedroom Manhattan apartment, you might purchase a four-bedroom beachfront home in most of the Southeastern U.S.
There are good reasons for these differences, and you’re going to pay more for being close to city centres, good schools, beaches, or whatever the case is. As the experts in real estate like to say, “location, location, location.”
A recent study by GOBankingRates evaluated the affordability of homes in all 50 U.S. states and the District of Columbia. In particular, the analysis examined how much house you can buy with a fixed budget of $300,000 in square footage. Obviously, this has its shortcomings, as home prices can vary dramatically within a certain state depending on your location. Apparently the price per square foot that you are going to pay in Manhattan is higher than you can pay in upstate New York rural areas.
Having said that, here are the seven states where the most house, listed in ascending order, can be purchased with a $300,000 budget. If you’re in a high-cost area, you might be surprised to see how far your money in one of these states could go.
In Oklahoma $300,000 on average will buy you a house of 3,175 square feet. Be mindful, though, that Oklahoma has an overall sales tax rate of 8.82% — one of the highest in the U.S. — and that can go up to 11%, depending on where you are in the state.
Alabama’s $92 per square foot median home price translates into a $300,000 $3,256-square-foot home.
In addition to cheap real estate, Alabama has the second lowest property tax rate in the U.S., at an average value of just 0.43 percent of the home — about one third of the national average. In addition, homeowners aged 65 and older do not pay any property taxes at all (but may pay at the level of the city and county).
5. West Virginia
With a median price of $89 per square foot in West Virginia, your budget of $300,000 could buy a 3,360 square-foot home.
West Virginia also has one of the lowest U.S. property tax rates, the average bill being just 0.59 percent of the value of a home. Savings can be offset by the state’s top income tax rate of 6.5 percent, average sales tax rate of 6.2 percent, and income-dependent social security taxes.
The housing market of Ohio as a whole is only marginally cheaper than that of West Virginia, as a $300,000 budget might purchase a 3,366 square feet home. Although Ohio’s top income tax rate of 4,997 percent does not sound very high, it should be remembered that Ohio residents often pay municipal income tax with rates as high as 3.38 percent.
In Arkansas, $300,000 can buy a home of 3,390 square feet and the state’s average property tax rate of 0.62 percent is among the nation’s lowest. Arkansas has some of the lowest property taxes in the U.S., with the average homeowner paying only $716 a year, but the combined average (state and local) sales tax rate of 9.3 percent may somewhat offset this.
Mississippi is the second-lowest state for buying a house. A budget of $300,000 could buy you a 3,402 square-foot home. As the state ranks in the top quartile for corporate tax-friendliness, Mississippi is also a good place to be a business owner. Mississippi is also one of the most tax-friendly retirement states, with no Social Security benefits taxes or any qualified retirement income.
Indiana is the most affordable state to buy a home, with a median price of $86 per square foot. A budget of $300,000 could buy up 3,478 square feet of living space. Due to its low individual income tax rate (a flat rate of 3.3 percent) and low average property tax, The Tax Foundation also ranks the state as one of the 10 most tax-friendly states.