This post is by Chris Dickert from Visual Capitalist
Visualized: The Decline of Affordable Housing in the U.S.
Over 80% of U.S. residents have chosen to live in an urban setting, as of 2023.
And with that number set to rise to nearly 90% by 2050, house prices are rising, with significant consequences to housing affordability.
This visualization, the second in the Reimagining Home Series from our sponsor Boxabl, takes a deep dive into the evolution of the housing market in the U.S.
Housing Affordability At Its Lowest Ebb in Decades
The U.S. house-price-to-income ratio, which tracks house prices in multiples of annual income, has steadily climbed since the mid-1980s, when the market was recovering from a real estate crash earlier that decade.
Historically, the ratio has hovered between three and four. But in the early aughts, the ratio passed four and kept going, reaching a high of 5.11 in 2005. The ratio fell somewhat in the aftermath of the subprime mortgage meltdown, but never returned to historical averages. New records were set in 2014 (5.33), and again in 2021 (5.61).
Note that because median housing prices and median household incomes are released at different frequencies, quarterly versus annually respectively, in order to calculate the ratio, housing prices were averaged on an annual basis.
|Year||Median House Price||Median Household Income||Ratio|