The economy may be booming and unemployment low, but America remains an unaffordable place to live in many parts of the country due to stagnant wages and rising housing costs.
In fact, the actual cost of living surpasses the median income earned in 42 U.S. states, according to a new analysis by GOBankingRates (GBR).
“What’s scary is the macro trend,” said Andrew DePietro, a research and data analyst for GBR. “It’s matching up with real life news, which is that the cost of living is getting to the point nationally where it’s just bad in the majority of places. It’s mainly due to wages stagnating and housing costs going up across the country.”
The personal finance site calculated the cost of living in all 50 states and compared it with the median income, revealing that Hawaii is the most unaffordable place to live in America.
Experts reached that conclusion based on the 50-30-20 budgeting rule, which dictates half of your income should go toward bills, rent and necessities like groceries, while 30 percent should be spent on discretionary spending or splurges and the remaining 20 percent would go toward savings.
The Top Ten most unaffordable states:
- The cost of living for a household of one to two people in Hawaii is $111,892, while the average income is $71,977 – a pay gap of nearly $40,000. Experts said that makes the Aloha state unaffordable even for people who choose to avoid saving any income at all.
- Oregon was the second most unaffordable state, with a $24,808 difference between the median income of $53,270 and the $84,685 cost of living.
- California followed, with a $20,902 pay gap, based on the state’s $63,783 median income and an $84,685 cost of living.
- New York ranked fourth with an $80,420 cost of living and a median income of $60,741 for an affordability gap of $19,679.
- Maine came in fifth place, with a median income of $50,826 and a $69,850 cost of living for a $19,024 affordability gap.
- West Virginia came in sixth place despite its affordable $58,138 cost of living due to the state’s low median income of $42,644, resulting in a gap of $15,494.
- Rhode Island followed, with a $15,006 affordability gap between the $73,393 cost of living and its $58,387 median income.
- Vermont ranked eighth, with a $14,406 gap between the state’s $70,510 cost of living and a $56,104 median income.
- Montana came in ninth place due to a $14,022 shortfall between its $62,402 cost of living and $48,380 median income.
- Rounding out the top ten was Nevada, which had a $13,152 gap between its $66,246 cost of living and $53,094 median income.
At the other end of the spectrum, eight states actually had median incomes higher than the cost of living, with Virginia ranking most affordable in the nation.
Utah, Wyoming, Minnesota, New Jersey, New Hampshire, Illinois and Colorado are also affordable states.
Here’s the complete list:
