CNBC make it 2024-04-15 02:00:54


The 14 U.S. states where you can still afford to buy a home if you earn less than $75,000

There are only 14 U.S. states where residents who earn less than $75,000 can afford a median-priced home, a new Bankrate analysis reveals.

That number has dropped from 36 in just four years, illustrating how rising home prices have tilted the balance of homeownership toward the wealthiest Americans.

Considering that half of the country’s households earn a median of $74,580 or less, these 14 states are some of the few places where middle-income earners can afford a typical home.

To calculate homeownership costs in each U.S. state, Bankrate assumes a 20% down payment, no homeowner association (HOA) fees or mortgage insurance and a 30-year fixed mortgage interest rate of 7.05%. Monthly mortgage payments for each state are based on median sale price data from online broker Redfin.

Here’s a look at the 14 states where homes are most affordable, based on the annual income needed to cover homeownership costs without spending more than 28% on housing.

  1. Mississippi: $63,043
  2. Ohio: $64,071
  3. Arkansas: $64,714
  4. Indiana: $65,143
  5. Kentucky: $65,186
  6. Iowa: $65,314
  7. Oklahoma: $65,443
  8. Michigan: $66,343
  9. Missouri: $66,986
  10. Louisiana: $67,886
  11. Alabama: $69,514
  12. Kansas: $72,343
  13. North Dakota: $73,414
  14. West Virginia: $74,957

Median-priced homes in these states cost $300,000 or less, a significant discount compared with the U.S. median price of $402,343.

While these 14 states may have cheaper properties available, there are trade-offs to consider, like higher rates of poverty and fewer high-paying jobs compared with the rest of the country. Many of them are among the most rural in the United States, and incomes in rural areas tend to be lower than in large urban cities.

In contrast, you’d need to make $197,057 to afford a median-priced home worth $739,200 in California — the highest amongst all states.

The median income needed to afford a home in the U.S. overall is $110,871 — up from $76,191 in 2020. This is largely due to a longstanding shortage of homes that was exacerbated by supply chain constraints early in the pandemic. Since 2020, median home prices have risen by 27%, while mortgage rates have nearly doubled.

However, price gains were more dramatic in states where there has been long-running demand for homes, like California and New York. Home prices in rural or Rust Belt states like Mississippi or Michigan have not increased as much as others, making them relatively more affordable for middle-class earners.

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The phenomenon of your rich friend being the stingiest rings true, expert says—here’s why

Scrolling through my Venmo transactions, it’s evident that requests for comically small amounts of money are almost always made by friends who were either born with or earn more money than me.

The experience is curious and seemingly universal.

“Rich people love to Venmo request you $4.72 for like half a bagel because they have no concept of money and don’t understand that working class people operate under an economy of buying someone a beer,” one X user mused.

“Friend making $450k as a software engineer: ‘Can you Venmo me $3.62 for your share of the Uber ride?’” another wrote.

Susan Bradley, founder of the Sudden Money Institute, coaches clients who have quickly or unexpectedly come into large windfalls of cash on how to transition out of being a have-not.

The phenomenon of the rich friend being the stingiest rings true, she says: “People with more money than their peers struggle with generosity.”

‘They are peerless’

If a person knows they are in a higher income bracket than their friends, they likely feel isolated or “othered,” Bradley says.

“People with substantially more [money] have a smaller population to have as peers,” she says. “So in some ways they are peerless.”

Because their money is what differentiates them from their friends, they start believing that their money is why they have friends.

“They don’t want to be taken advantage of or to feel like, ‘I have money and that’s why people hang out with me,’” Bradley says. “It feels very invalidating.”

These insecurities manifest as a $4 Venmo request.

“If someone does the small-dollar Venmo, it means they don’t feel good,” Bradley says.

If someone does the small dollar Venmo, it means they don’t feel good.
Susan Bradley
Founder of Sudden Money Institute

‘With more wealth comes more of a focus on transactional relationships’

Being economically peerless also means you might struggle with feeling a sense of community, says Hal Hershfield, a professor at the University of California, Los Angeles Anderson School of Management. Hershfield studies the psychology of long term decisions-making.

“With more wealth comes more of a focus on transactional relationships, which could then bleed over into relationships that should be communal,” Hershfield says.

Let’s say you’re moving apartments. If you’re trying to save money, you might enlist the help of a few friends. This favor signals a communal relationship.

If you earn enough money to pay for movers, then this experience becomes transactional.

Soon, you might start to see the world in a more transactional way, he says, and that will seep into your friendships.

If a friend Venmo requests you for small amount of money, Bradley suggests doing two things: pay it and then ask if something else is going on with them.

“If they’re doing that, it’s a way of not being taken advantage of,” she says. “It could be about something in the past with longer legs that hasn’t been dealt with. They don’t care about the $4.”

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The income everyday Americans earn in every U.S. state—see how your salary measures up

In 2023, the median annual wage for all U.S. workers was $48,060, according to the Bureau of Labor Statistics, which means Americans in around half the states earned less than that benchmark, while workers in the other half earned more.

Check out this map to see the median amount workers earn in every U.S. state:

The Northeast and Western regions tend to have higher-earning populations compared with the South and some states in the Midwest.

Massachusetts tops the rankings with the highest median wage of $60,690 for individual workers, while Mississippi has the lowest median wage in the country at $37,500.

Here’s the median annual wage for workers in every state:

  • Alabama: $41,350
  • Alaska: $56,140
  • Arizona: $47,680
  • Arkansas: $39,060
  • California: $54,030
  • Colorado: $54,050
  • Connecticut: $56,130
  • Delaware: $49,280
  • Florida: $45,070
  • Georgia: $45,480
  • Hawaii: $50,510
  • Idaho: $44,240
  • Illinois: $48,730
  • Indiana: $45,470
  • Iowa: $46,460
  • Kansas: $45,250
  • Kentucky: $43,730
  • Louisiana: $41,320
  • Maine: $47,590
  • Maryland: $55,810
  • Massachusetts: $60,690
  • Michigan: $46,940
  • Minnesota: $50,880
  • Mississippi: $37,500
  • Missouri: $45,080
  • Montana: $45,690
  • Nebraska: $46,440
  • Nevada: $44,810
  • New Hampshire: $49,980
  • New Jersey: $54,860
  • New Mexico: $43,620
  • New York: $56,840
  • North Carolina: $45,440
  • North Dakota: $48,830
  • Ohio: $46,690
  • Oklahoma: $41,480
  • Oregon: $50,010
  • Pennsylvania: $47,430
  • Rhode Island: $50,970
  • South Carolina: $42,220
  • South Dakota: $43,680
  • Tennessee: $43,820
  • Texas: $45,970
  • Utah: $47,020
  • Vermont: $49,630
  • Virginia: $49,920
  • Washington: $59,920
  • West Virginia: $39,770
  • Wisconsin: $47,590
  • Wyoming: $47,250

Local wages typically correlate with local cost of living, which means many of the states where workers earn the most are also the states that are most expensive to live in.

Massachusetts, for example, has the second-highest cost of living in the U.S., while Mississippi has the second-lowest living costs, according to the Missouri Economic Research and Information Center state-by-state cost of living index, based on Council for Community and Economic Research survey data.

A few states are outliers, though. In Wyoming, workers have the 26th highest median wage, but the 18th lowest cost of living. Florida, similarly, has the 14th lowest median wage, but is only the 29th cheapest state to live in, according to MERIC. 

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Don’t miss these exclusives from CNBC PRO

  • Friday’s biggest analyst calls: Apple, Amazon, Tesla, Microsoft, Boeing, First Solar, Schwab & more
  • Citi says this ‘high risk’ but ‘attractive’ global stock has 280% upside
  • This AI stock could fall 50% and has an ‘exaggerated artificial intelligence narrative,’ Morningstar says
  • Morgan Stanley names 3 overlooked global tech stocks, giving one almost 100% upside

5 in-demand freelance jobs you can do from home—some pay over $200 an hour

More Americans are freelancing — and as demand for independent workers surges, so has the availability of high-paying freelance opportunities. 

The number of professionals freelancing in the U.S. hit an all-time high in 2023, increasing to 64 million people, or 38% of the U.S. workforce, from 60 million the year earlier according to recent research from Upwork. 

Businesses are increasingly relying on freelancers to save on headcount and real estate expenses, Yoav Hornung, head of verticals and innovation at Fiverr, recently told CNBC Make It

Many of these project-based jobs can come with six-figure payouts. The number of independent workers making $100,000 or more a year grew by 53% between 2021 and 2023, according to an October 2023 report by MBO Partners, a provider of back-office services to independent workers.

But the services people are hiring independent contractors for are constantly changing. To help freelancers find the best opportunities, Freelancer.com has identified five in-demand freelance jobs, based on more than 250,000 listings posted on its database between January and March 2024. The earnings information comes from this sample of projects.

All of these jobs can be done from home and pay over $100 per hour:

1. Programming 

Average hourly rate: $250 

2. eCommerce development and management 

Average hourly rate: $250 

3. Graphic design 

Average hourly rate: $140 

4. Transcription

Average hourly rate: $200 

5. Creative writing 

Average hourly rate: $140 

While coding, programming and other tech specialties have long been sought-after freelance services, demand for e-commerce contractors has “exploded” in recent months, Sebastián Siseles, international vice president at Freelancer.com, tells CNBC Make It.

The global e-commerce market has been steadily growing over the last several years, a trend that was accelerated during the Covid-19 pandemic when more companies had to shift to online business models. This has sparked demand for other freelance services related to running an e-commerce site, Siseles points out, including user interface design and copywriting. 

If you’re interested in freelancing, make sure you understand the timeline of the job you’re applying for and how you’ll be compensated. Freelance jobs may last for part of a day, a week, a month, a year or even longer — and while some jobs are priced hourly, others might have a fixed project rate. 

You can also set yourself apart as a freelancer by creating a digital portfolio of work samples to share with prospective clients. To find out where the jobs are and list your own services, consider creating a profile on Upwork, Freelancer.com, Fiverr, TaskRabbit or a different website advertising freelance jobs.

Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay.

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Couple pays $1,600 a month for a 1-bedroom apartment in Brooklyn—they have 150 plants: Look inside

In 2020, Vionna Wai, 30, and her husband, Chucky Hui, 29, moved into a two-family home in Bensonhurst, Brooklyn, with his parents.

The couple pays $1,600 a month to live in the one-bedroom, one-bath apartment on the second floor, while Wai’s in-laws pay the rest of the $3,500 monthly rent and live on the first floor, according to documents reviewed by CNBC Make It.

While their living arrangement might be familiar to some — 16% of U.S. millennials lived with their parents in 2022, according to Axios — what sets Wai, a construction engineer, and Hui, a UX designer, apart are the 150 houseplants and two cats, Mi and Ding, they moved in with.

“When I look at my houseplants, I really am living in the moment. I don’t think about like my stress or worries about work or anything like that,” Wai tells CNBC Make It. “I’m just focusing on taking care of my plants and making sure they’re happy and that for me is very calming.”

Wai’s plant collection might be overwhelming for some, but she doesn’t think 150 plants is excessive.

“I’m just a homebody that wants to stay at home all day to play with my cats and plants,” Wai says. “Once I go to work, it’s all fast-paced… but when I come home, it’s a complete switch. I’m in my own element and everything’s just very calming and lively.”

Wai says there is actually very little maintenance — she spends about 30 minutes a week watering them and does some pest control between seasons.

“They just need water, sun, and some love,” Wai says. “It’s really not that hard to take care of them but I think people fail to see them as living things sometimes. How much love you put into that plant it’ll give back to you.”

One of the most expensive plants in Wai’s collection is a Phildendrom Florida Beauty she bought for $350 during the pandemic. Wai and her friend split the cost with the plan of propagating the plant. While the price tag might have scared some away, Wai says it was 100% worth it.

“It gave me so much joy.”

Though Wai admits she was scared it would die on her: “Part of the journey is nursing it back to health and being able to share with friends.”

Because many plants can be toxic to cats, the couple has an area they call “the cat jungle corner” that houses their pet-friendly plants. Mi is 10, while Ding is five.

“I’ve learned to train my cats to coexist with my plants,” Wai says.

The couple also makes sure to use cat repellant on the plants and keeps the toxic ones out of Mi and Ding’s reach.

The only place that Wai and her husband don’t have any plants at all is in their bedroom.

Because the couple is currently renting, they made sure to keep their plant set up renter-friendly but eventually, Wai admits that she would love to have a greenhouse.

“I always have this dream of moving to Japan and just living in the countryside with the rice paddies on the side and just, you know, a greenhouse and just have that calm, like country life,” she says.

Want to make extra money outside of your day job? Sign up for CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories. Register today and save 50% with discount code EARLYBIRD.

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