Half Your Income Just For Housing? These US States Are Breaking Budgets

A WalletHub analysis released on Wednesday showed Hawaii has the highest housing cost burden in the U.S.

Hawaiian homeowners spend 50.02% of their median monthly household income on housing, including mortgage and energy costs. California ranks second at 43%, followed by Massachusetts at 33.67%, while Iowa sits lowest at 17.26%.

The ranking combines mortgage, rent and home energy costs and adjusts them against median income across all 50 states.

High Costs Despite High Incomes

Hawaii's burden stands out even with relatively strong earnings. The state has the fourth-highest median household income at $100,389, yet housing costs still consume a disproportionate share. The report attributes this to consistently high expenses across categories, with Hawaii recording both the highest mortgage payments and the highest home energy costs in the country.

California shows a similar pattern. Despite a median income of $99,122, residents spend 43% of their income on housing, driven by the second-highest mortgage costs and elevated energy expenses. Massachusetts ranks third, with housing consuming about 34% of income, alongside the second-highest energy costs and third-highest mortgage payments.

Supply Deficit And Market Strain

The findings align with broader structural pressures in the U.S. housing market. The Council of Economic Advisers estimates a housing shortfall of at least 10 million homes, driven by zoning constraints, permitting delays and rising construction costs.

Recent market data also shows demand remains weak despite higher inventory, with existing home sales falling and many buyers unable to act at current price and rate levels.

Financing conditions remain restrictive. The average 30-year fixed mortgage rate stood at 6.18% in March, according to Freddie Mac (OTC:FMCC), keeping many buyers on the sidelines.

Renters Face Even Higher Burden

Pressure is more severe in the rental market. Hawaii ranks first again, with renters spending 62.52% of median income on housing. New York follows at 61.28%, with Maine at 52.72% and Massachusetts at 51.47%.

At the lower end, Oklahoma records the smallest rental burden at 20.29%, highlighting wide regional disparities in housing affordability.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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