The Best And Worst States To Buy A Home In 2025

When it comes to buying property in the United States, real estate conditions are quite different from one state to another. Some states are more homebuyer-friendly than others. Of course, conditions can shift from one year to another, and it matters it you're a current homeowner or a first-time home buyer. In 2025, Georgia, Michigan, and North Carolina are some of the best states to buy your first property in, while Oregon, Illinois, and New Jersey are among the ones to steer clear of.

So, what makes a state ideal for homeownership? It goes without saying that affordability and availability are the top factors. Areas with reduced home prices and a decent amount of new construction tend to perform best for homebuyers. It's worth noting that you can't have one of these factors without the other. If a state has affordable housing but not enough homes, then those prices will eventually rise. Likewise, an abundant supply of new homes doesn't mean anything if they cost more than what the average homebuyer can afford. 

Then there's the property tax factor. You'll want to look for states with low property taxes. Even if a home's purchase price fits within your budget, the yearly tax bill can turn it into a financial burden. A $200,000 home with a 4% tax rate, for example, would eventually cost more than a $250,000 home with a 1% tax rate. You'll also want to account for climate-related risks. The threat of extreme weather events, like wildfires, floods, and hurricanes, is a major red flag for the housing market. Other factors to keep in mind include cost of living, quality of life, and career opportunities — although a state with high salaries might not have the best home prices. 

A number of states seem to tick most, if not all, the boxes for ideal home buying. One of these states is Georgia. Its 0.81% property tax and median home price of $272,900 make it an attractive option for homebuyers, especially young families, remote workers, and military families. And unlike other states with a low cost of living, Georgia's economy is on the rise, with tax incentives attracting startups, major corporations, and even film studios. North Carolina is another state to consider, with a 0.70% property tax and $259,400 median home price. According to National Mortgage News, North Carolina and Georgia ranked in the top five on the list of states with the highest number of new construction approvals, proving these states are on the rise. 

Meanwhile, Michigan's mere $217,000 median home price, combined with a moderate $1.28% property tax, makes it a quiet haven for long-term homeowners. Plus, families and young professionals alike will find the state's 9.6% cost of living index appealing. Minnesota, on the other hand, combines low property taxes with a housing startup program that first-time homebuyers, in particular, would appreciate. Ohio is also enjoying attention from homebuyers in 2025. The Midwestern state boasts tax credits, economic growth, and a median home price of $199,200 — one of the lowest in the nation. These states offer reasonable home prices, fair property tax rates, and healthy economies. 

While some states are finding a healthy balance between affordability and growth, others are trapped in a cycle of high prices, steep taxes, and questionable conditions. The worst states to buy in 2025 can pose some major financial challenges for homebuyers trying to build equity. With one of the most expensive property taxes, Illinois is among the states that fall in this category. Homeowners there face an average property tax rate of around 2.60%, nearly double the national average (0.99%). Combine that with statewide budget deficits and financial instability, and it's easy to see why Illinois is not ideal for new homeowners.

New Jersey's housing market isn't any better, with a 2.23% property tax rate and a median home price of around $545,000. And if that's not bad enough, the Garden State has a shortage of job opportunities and extremely high health insurance premiums. You may also want to keep Louisiana off your radar. The state might have affordable homes and a moderate property tax rate, but that is paired with limited job opportunities. And being prone to natural disasters means it has high insurance costs. 

California, Hawaii, and Massachusetts round out the list of worst states to buy a home in. These states rank top three in the U.S. for most expensive average home prices (via Redfin) and cost of living (via World Population Review). Home prices in California are among the nation's highest, averaging well over $700,000, while Hawaii's cost of living index is significantly higher than that of any other state.