What State Has the Most Expensive Homes? Here’s Where Property Costs the Most in the U.S.
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Based on standard affordability guidelines (30% of income for housing costs)
Source: U.S. Department of Housing and Urban Development
When you think about where homes cost the most in the U.S., you might picture beachfront mansions in California or luxury condos in New York. But the reality is more specific - and more surprising. As of early 2026, California still holds the title for the state with the most expensive homes, with a median listing price hitting $912,000. That’s nearly double the national median of $468,000. It’s not just about luxury; it’s about supply, demand, and decades of policy shaping who can even afford to live there.
Why California Leads the List
California’s housing market isn’t expensive because it has the fanciest homes - it’s expensive because there aren’t enough homes to go around. The state added just 1.2 million housing units between 2010 and 2025, while its population grew by over 4 million. That gap has pushed prices up relentlessly. Cities like San Francisco, Los Angeles, and San Diego have median home prices above $1 million. Even smaller towns like Santa Cruz or Malibu regularly see homes selling for $2 million or more.
Part of the problem is zoning. Over 70% of California’s land is restricted to single-family homes only. That means no duplexes, no ADUs (accessory dwelling units), and no townhomes unless they’re in very limited areas. When you restrict how much housing you can build, and you have millions of people trying to move in - from tech workers to teachers - prices climb. It’s basic economics.
Runner-Up: Hawaii
If California is the king of expensive homes, Hawaii is the prince. The median home price there sits at $876,000. But here’s the twist: Hawaii’s cost isn’t driven by tech booms or urban sprawl. It’s geography. You can’t expand an island. There’s no land to build on. Everything - lumber, steel, concrete, even appliances - has to be shipped in. That adds 15-20% to construction costs alone.
Plus, tourism and second-home buyers dominate the market. Nearly 1 in 5 homes in Maui and Oahu are owned by non-residents. That means locals - teachers, nurses, firefighters - are priced out. Some schools report over 40% of teachers commute over an hour each way just to afford rent. It’s not a housing crisis. It’s a survival crisis.
The Other High-Cost States
After California and Hawaii, the next three most expensive states are:
- Massachusetts - median price: $721,000. Boston’s tech and education sectors drive demand. Cambridge homes often sell for $1.5 million, even if they’re 1,200 square feet.
- Washington - median price: $698,000. Seattle’s Amazon and Microsoft workforce has pushed prices up since 2015. The median home in Bellevue is now $1.1 million.
- New Jersey - median price: $672,000. It’s not the big cities that drive prices - it’s the suburbs. Families pay premium prices for access to top-ranked schools in towns like Princeton and Short Hills.
These states all share a common thread: strong job markets, limited housing supply, and high demand from both locals and out-of-state buyers. They’re not just expensive - they’re structurally unaffordable for middle-income earners.
What About the Rest of the Country?
While these five states dominate the top, the rest of the U.S. tells a different story. In states like Iowa, West Virginia, and Mississippi, median home prices hover around $180,000-$210,000. That’s not because they’re less desirable - it’s because they have room to grow. New housing gets built. Land is cheap. Schools aren’t perfect, but they’re functional. People aren’t fleeing.
The real divide isn’t between rich and poor states. It’s between states that let housing grow - and those that don’t. Texas, Florida, and Georgia added over 1.5 million homes each between 2015 and 2025. Their prices rose, yes - but not nearly as fast. In Atlanta, a $500,000 home still gets 3-4 offers. In San Francisco, it’s a bidding war with 12.
What This Means for Buyers
If you’re looking to buy a home in the U.S., and you’re not independently wealthy, you have two choices: move to a state where homes are affordable - or adjust your expectations.
Many buyers are choosing the second option. They’re buying smaller homes. They’re moving farther out. In Sacramento, people are commuting 45 minutes from Elk Grove just to get under $600,000. In Seattle, buyers are skipping the garage to save $80,000. In Boston, couples are buying 1,000-square-foot condos instead of 3-bedroom houses.
Others are leaving entirely. Since 2020, over 300,000 people have moved out of California each year. Many are heading to Nevada, Arizona, or even Tennessee. The dream of homeownership isn’t dead - it’s just relocated.
What’s Changing in 2026?
There are signs the tide might be turning - slowly. California passed new laws in 2025 allowing fourplexes on single-family lots. Oregon is fast-tracking permits for ADUs. Colorado now lets cities build affordable housing on public land. These aren’t magic fixes, but they’re steps.
Meanwhile, mortgage rates have dipped slightly in early 2026, hovering around 5.8%. That’s still high by historical standards, but it’s helped some buyers re-enter the market. The biggest shift? Buyers are no longer just looking at square footage. They’re looking at commute time, school access, and long-term cost of living. A $700,000 home in Boise might cost less overall than a $900,000 home in San Diego if you’re saving $300 a month on gas and childcare.
Final Thought: It’s Not Just About Price
The question isn’t just “What state has the most expensive homes?” It’s “Why do homes cost so much - and who gets left behind?” The answer isn’t found in a chart or a headline. It’s in the teacher who drives an hour to work. The nurse who sleeps in a garage apartment. The family that gave up on buying because they couldn’t find a $400,000 home in a state where the median is $800,000.
Housing isn’t just bricks and mortar. It’s stability. It’s safety. It’s the foundation of a life. And right now, in the most expensive states, that foundation is cracking.
Which state has the most expensive homes in 2026?
As of early 2026, California has the most expensive homes in the U.S., with a median listing price of $912,000. Hawaii comes in second at $876,000. Both states face severe housing shortages, high construction costs, and intense demand from both residents and out-of-state buyers.
Why are homes in California so expensive?
California’s high home prices come from a mix of factors: strict zoning laws that limit housing density, a population surge without matching construction, high land costs, and demand from high-income industries like tech and entertainment. Over 70% of land in the state is restricted to single-family homes only, making it nearly impossible to build enough housing to meet demand.
Is Hawaii more expensive than California for homes?
No, Hawaii is slightly less expensive than California, with a median home price of $876,000 compared to California’s $912,000. But Hawaii’s costs are driven by different factors - mainly geographic isolation. Everything from building materials to groceries must be shipped in, raising construction and living costs. Also, over 20% of homes are owned by non-residents, making it harder for locals to buy.
What are the top 5 most expensive states for housing in 2026?
The top five most expensive states for homes in 2026 are: 1) California ($912,000 median), 2) Hawaii ($876,000), 3) Massachusetts ($721,000), 4) Washington ($698,000), and 5) New Jersey ($672,000). All five have strong job markets, limited housing supply, and high demand from both local and out-of-state buyers.
Are there any states where homes are becoming more affordable?
Yes. States like Texas, Florida, Georgia, and Tennessee have seen slower price growth because they’ve allowed more housing construction. In cities like Austin, Atlanta, and Nashville, new developments - including townhomes and duplexes - are helping bring prices down relative to coastal markets. These states added over 1.5 million new homes each between 2015 and 2025, keeping supply closer to demand.
Should I avoid buying in high-cost states?
Not necessarily - but you need to be realistic. If you’re buying in California or Hawaii, expect to pay a premium for location, and be prepared to compromise on size, age, or commute time. Many buyers now prioritize long-term affordability over square footage - like choosing a smaller home farther out with lower taxes and gas costs. The key is matching your budget to the market, not chasing a dream that might not fit your finances.
