Minnesotans Need a Shocking Salary to Afford a ‘Typical’ Home

There goes the hope of buying a home for a lot of people. At least for the time being. I'm really hoping that something changes so housing becomes more affordable again. But right now, Minnesotans need to get paid a shocking amount of money in order to afford just a typical home in Minnesota.

This is according to a study that was done by Bankrate. They figured out how much aspiring homeowners need to make in order to afford a typical home in each state. Unfortunately, Minnesota is one of the cheaper states to buy a home, but that's not saying much.

What's a 'Typical' Home in Minnesota?

Ok first question is: What exactly is a 'typical' home in Minnesota? Are talking about houses that are over half a million? Because I can see that requiring this higher salary. But that's not the typical price of a home in Minnesota.

In Minnesota in January 2024, the average home sold for $323,900. The average monthly mortgage payment is $2,144 per month.

To give you a visual, a typical home looks like this one that's for sale in St. Paul. It's 'coming soon' as of writing this, listed for $320,000 with 4 bedrooms, 1 bathroom, and it's 2,080 sqft.:

And this one in Rochester. It's listed at $329,900 with 4 bedrooms, 2 bathrooms, and is 2,240 sqft.:

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And this one in Duluth. It's listed for $300,000 with 4 bedrooms, 2 bathrooms, and it's 2,214 sqft.:

There's nothing wrong with any of these homes! But the salary needed to buy a house like the ones above, according to this study, is close to six figures, which seems crazy to me. We'll get to the specific salary number in a moment.

Homeownership Almost Doesn't Feel Plausable Anymore

One reason you have to make such a good chunk of change to afford even a typical home is because "wages haven’t kept pace with home prices." Bankrate writes:

"Income needed for a typical home purchase jumped over 50 percent in nearly half of the U.S. since 2020."

That's insane!

There has also been a big jump in mortgage rates. That means you need to make even more money to qualify for a home that you likely would have easily been approved for a few years ago.

How Much You Have to Make in Minnesota to Afford a Typical Home

According to Bankrate's study, Minnesotans need to make at least $91,886 per year in order to afford a home of around $323,900.

Now here's the thing that will really make you shake your head. In 2020, you needed to make at least $67,890 per year to afford a typical home. That's a 35.3% increase. I bet you didn't get that big of a raise in the past 4 years.

The Most Expensive Places to Buy a Home Right Now

Using Bankrate's study, I also have the top 5 places where you need to make the most money in order to afford an average-priced home and it's well into the 6-figures.

Number 5 is Washington state where you need to make $156,814 to afford an average-priced home. Then in Massachusetts, you need to make $162,471. And in DC you need to make $167,871.

Then we make about a big jump to the top two spots. The state that requires the second highest salary to afford an average-priced home is Hawaii at $185,829. And number one is California at $197,057.

I'm not at all surprised by the top three, but it's still really sad that this much of a hike across the country is dashing a lot of people's dreams of owning a home.