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The housing market is starting to cool in some places as mortgage rates rise. But there are still states where prices are sky high.
Nationwide, home prices were 5.5% higher in February compared to the same period last year, according to property data company CoreLogic. Prices remain high in many markets.
The following is a list of the top 10 states with the highest percentage gain in the cost of a home in the past year. If you plan to buy a home in one of these states, it might be wise to find a way to make extra money before you begin shopping.
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Ohio tied with Michigan in terms of housing price increase at just 7.8% year over year. The state's cost of living isn't quite as healthy, however, coming in at just over 5% under the national average.
8. Illinois
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Year-over-year increase in home prices: 8.4%
Illinois has seen an increase in home prices, primarily in its most prominent city of Chicago, which has matched its year-over-year price change of 8.4%.
The state as a whole has a cost of living just 8% lower than the national average.
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Though Wisconsin had the nation's seventh-largest increase in home prices, the state still boasts a cost of living 5% lower than the national average.
Groceries, housing, utilities, and transportation are all relatively affordable. Importantly, however, the state's health care is the fifth-priciest in the nation.
6. New Hampshire
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Year-over-year increase in home prices: 9.2%
New Hampshire had the sixth-highest increase of any state. Utilities are especially expensive in New Hampshire. You'll only pay more in two states and one territory: Alaska, Hawaii, and Puerto Rico.
5. Connecticut
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Year-over-year increase in home prices: 10.0%
This one stings, as living in Connecticut is already 12.8% more expensive than the average state. It's now also the state with the fifth-highest growth in home prices.
Maine, a dream state for many, couples its rising home costs with a cost of living nearly 10% higher than the national average.
3. Rhode Island
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Year-over-year increase in home prices: 11.6%
If they can get past the increase in home prices, many will find Rhode Island somewhat affordable, and its cost of living is 10.7% higher than average.
2. New Jersey
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Year-over-year increase in home prices: 12.5%
New Jersey had the second-highest growth in home prices in the latest report.
The Garden State fits the Northeastern profile — that is, it has a higher cost of living (+13.9%) than average — but its healthcare costs are .7% below average
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Though it saw the highest increase in home prices, South Dakota is 7.6% less expensive to live in than the average state across the country.
Bottom line
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If you’re looking for a new home, think carefully about where you buy. You want to avoid making foolish money mistakes, especially with such a big purchase.
So, if you're flexible, consider settling down in states where home prices haven’t shot to the moon.
There are also other ways to save money, such as reducing the price point of the home you’re looking for. You might also want to wait if you think prices in your area will come down as mortgage rates go up.
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