U.S. housing affordability declines as home prices outpace income

Home affordability in the United States has declined significantly as home prices have outpaced income growth and inflation over several decades. While historical comparisons often focus on high mortgage rates, such as those seen in the 1980s, the rising home-price-to-income ratio presents a more substantial barrier to entry for modern buyers.

In 1984, the median new home price was approximately $79,900 against a median household income of $22,400, a ratio of 3.6. By 2025, the median existing home price reached $429,100 against a median household income of $87,460, a ratio of roughly 4.9. This shift is further compounded by the increasing burden of down payments; a 20% down payment in 1984 represented about 71% of the median annual income, whereas today it represents nearly 98%.

Data from the U.S. Census Bureau shows that average home prices have risen dramatically since the 1960s. In 1960, a typical home cost $11,900, whereas by July 2026, the average U.S. house price reached $508,800. Reports indicate that since the 1960s, home prices have risen 2.4 times faster than overall inflation.