The economy may be booming, but slow wage growth, inflation and expensive housing are making most of America’s states “unaffordable.”
As reported by the Daily Mail, citing analysis by GOBankingRates, the cost of living is greater than median income in 42 states, with Hawaii the least affordable state in the union.
The cost-of-living analysis is based on a household budget that dedicates 50 percent of income for bills, 30 percent for discretionary spending and 20 percent for savings.
In Hawaii, the cost of living for a household of one to two is $111,892, and the average income is $71,977. Oregon is the second-most unaffordable state, with an $84,685 cost of living and $53,270 median income. Third is California with a $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; and rounding out the top five was Maine, with a median income of $50,826 and a $69,850 cost of living.
As America’s economy has expanded, inflation is increasing and home prices are higher.
Median home values are up 7.6 percent over last year, according to Zillow, while higher mortgage rates are also contributing to greater housing costs.
American consumers are paying more for a variety of goods, with the consumer price index, which measures the cost of a basket of goods, appreciating by 2.3 percent in September, compared to September 2017.
Fortunately, after a period of stagnancy, wages are starting to tick higher. According to the Labor Department, median weekly earnings of America’s 117.2 million full-time wage and salary workers was 3.3 percent higher in the third quarter of 2018 than a year earlier.