The surprising quaint East Coast state where EVERY city is now unaffordable for the
It may be America’s smallest state, but what Rhode Island lacks in size, it more than makes up for in soaring home prices.
The latest housing data shows property prices have surged so dramatically that all eight of the state’s cities are now considered unaffordable for the average American.
In 2025, analysts found that a household needs an annual income of about $130,000 to afford a median single-family home on a 30-year fixed mortgage – far exceeding the national median household income of roughly $86,000.
Renters are feeling the strain, too. A household income of approximately $60,000 is now required to comfortably afford an average two-bedroom unit. That figure is well above the typical renter salary of $48,343.
New Shoreham – the only town on Block Island – ranks as the most expensive place to live in the Ocean State, with median home prices hovering around $3.5 million.
Other affluent, high-cost areas include Jamestown, Little Compton, and Newport.
Jake Krimmel, a senior economist at Realtor.com, told the Daily Mail that the primary driver behind the eye-watering prices is a persistent shortage of supply.
Housing is generally considered affordable if it costs no more than 30 percent of a household’s income.
It may be America’s smallest state, but what Rhode Island lacks in size, it more than makes up for in soaring home prices. Pictured, a beach in Newport. Above, the South Winds coastal estate in Jamestown, currently on sale for $11.2 million
The latest housing data shows property prices have surged so dramatically that all eight of the state’s cities are now considered unaffordable for the average American (pictured: a beach in Newport)
A household income of approximately $60,000 is now required to comfortably afford an average two-bedroom unit. That figure is well above the typical renter salary of $48,343 (pictured: Providence, Rhode Island)
‘Inventory remains low, both due to the mortgage rate lock-in effect and because of strong demand, often from out-of-state buyers,’ Krimmel explained.
‘In January 2026, there were on average just over 1,100 active listings across the whole state.’
While the extent of the affordability crisis was detailed in the 2025 Housing Fact Book released by HousingWorks RI at Roger Williams University, more recent data from Realtor.com suggests there are still no signs of the market cooling.
Krimmel added: ‘Median list prices in Rhode Island have been rising on an annual basis for 21 straight months; they were up 5.6 percent, landing at $540,000, in January 2026 – our latest data.’
He does not expect the upward trajectory to change anytime soon.
‘When housing markets become unaffordable, it ultimately comes down to supply and demand,’ he said.
‘In Rhode Island, there’s very little supply coming from existing homes and almost no new construction to speak of.
‘Demand has remained resilient enough – despite higher financing costs – to far outstrip the limited supply.’
Taylor Swift purchased an $18 million mansion in Rhode Island’s Westerly back in 2013 – she is pictured celebrating Fourth of July at the home with Gigi Hadid and Cara Delevigne in 2016
Jon Perroni, 30, grew up in Bristol, Rhode Island, but moved to New York several years ago to pursue a career in human resources. He says the latest housing data comes as no surprise after watching prices climb throughout his twenties
For many Rhode Islanders, rising property prices have pushed them to look elsewhere.
Jon Perroni, 30, grew up in Bristol, Rhode Island, but moved to New York several years ago to pursue a career in human resources.
He says the latest housing data comes as no surprise after watching prices climb throughout his twenties and seeing an influx of out-of-state buyers – including celebrities such as Taylor Swift, who purchased an $18 million mansion in Westerly back in 2013.
‘Having grown up in Rhode Island, I know a lot of people who have struggled with the current housing market,’ Perroni said.
‘From my perspective, it seems like the previous generation was able to purchase homes at the age my generation is now.’
Although Perroni still has family in the state, he does not view it as a realistic place to settle down. He noted that salaries in Rhode Island tend to lag behind those in New York.
‘This situation has led many young individuals like me to turn their attention to housing markets outside of Rhode Island,’ he said.
‘Back in the ’80s and ’90s, it was possible for the average family to afford a home in the state on a single income. Today, it has become much harder for first-time buyers to find opportunities. Rhode Island has limited available space – no surprise for the smallest US state – and zoning restrictions further reduce how much new construction can take place.’
Rhode Island has limited available space and zoning restrictions further reduce how much new construction can take place (pictured: Warwick Lighthouse in Rhode Island)
A three-bedroom penthouse at the Ocean House in Westerly where Swift has a property is currently on the market for $20 million
Jake Krimmel is a senior economist at Realtor.com
Still, there may be some hope on the horizon.
Chris Lewis, head of research at financial advice site FinanceBuzz, believes political momentum could eventually ease affordability pressures.
‘We’re hopeful there will be improvement in the coming years,’ Lewis said.
‘There has been a much stronger political push to lower housing costs in Rhode Island, including new initiatives aimed at increasing building permits and encouraging new construction. However, it’s unclear how quickly those efforts will meaningfully impact the market.’
He added: ‘Rhode Island is beautiful, with a rich history. It’s easy to understand why demand remains so high.’
For residents determined to stay, Lewis suggests looking inland rather than along the coast.
‘According to Zillow data, median home prices in Kent and Providence counties are 30 percent lower – or more – than in Newport and Washington counties, where average prices are around $700,000,’ he said.