How Have Home Prices Versus Income Grown Since 1980?

(Image courtesy of Miguel Delima/pexels.com)

A new report from Best Interest Financial, St. Clair Shore, Mich., and Clever Real Estate, St. Louis, Mo., analyzed how the median U.S. home price and the median household income have each changed since 1980.

The median U.S. home price has increased 551% since 1980. In comparison, the median household income has only increased 373%.

The median U.S. home price currently stands at $414,900, and the median household income is $81,604. That means there’s a home-price-to-income ratio of 5.08.

If the median household income had kept pace with home prices since 1980, It would have been $115,225 in 2024. Alternately, if home prices had grown at the same rate as income since 2000, the median home would have cost $336,994 in 2024.

The home-price-to-income ratio hit a peak of 5.83 in 2022. Although it’s dropped since then, it remains well above the pre-pandemic levels.

Much of the home price growth occurred in the five years following the onset of COVID-19 pandemic. Median home prices climbed 31% from $321,500 in 2019 to $420,300 in 2024. In contrast, the median household income grew by only 22%, from $68,700 to $83,730.

At points, income growth did outpace home price growth, including during the 2008 housing crash, but that hasn’t been enough to narrow the cumulative gap.