Are Housing Prices Matching Income?
- bphilton5
- Jul 29, 2024
- 2 min read
Across all contiguous states in the United States, housing prices have increased dramatically. However, have these increases matched the growth in people's salaries? How significantly has the housing market changed from 2014 to 2024, and are salaries experiencing comparable growth to housing prices? We aim to see if salary increases have aligned with housing price escalations.
Percentage of Income Growth Rate from 2014 to 2024
All states in the United States have had income increases in the last 10 years ranging from 7.7% to 38.4%. States in the northwest showed a notably larger income growth, with 5 out of the top 10 states in terms of income change being from this region. On average, across the country, the income change over the 10-year period stood at 23.4%.
Percentage Increase in Prices of Single-Family Houses from 2014 to 2024
All states in the United States have had an increase in Single Family Housing Prices over the last 10 years ranging from 27.3% to 160.6%. States in the northwest showed a notably larger change in Single Family Housing Prices, with 5 out of the top 10 states in terms of income change being from this region. On average, across the country, the income change over the 10-year period stood at 92.6%.
Ratio 2014
Ratio 2024
Percentage Increase in Single Family House Prices Relative to Income from 2014 to 2024
Median House Price
Over
Average Annual Income
Example
$500,000 Dollar House
$150,000 Annual Income
$500,000
/
$150,000
=
3.33 Ratio
This ratio determines which states have the highest cost of living in single-family houses relative to the state's average income. Typically, states with higher incomes also face higher housing costs.
The average ratio in 2014 was 3.6, increasing to 5.7 by 2024, marking a 58% rise. This increase is driven by housing costs going up by 92.6% compared to a more modest 23.4% increase in average income. Out of the all the state 28 out 48 states have had an increase in ratio of 50% or more.
Have these increases matched the growth in people's salaries? How significantly has the housing market changed from 2014 to 2024, and are salaries experiencing comparable growth to housing prices?
No, the rise in income is far below the increase in single-family housing prices. On average, housing prices in the United States have surged by 92.6%, where incomes have only risen by 23.4%. This ratio has increase 58% over the past 10 years, representing a substantial disparity.
How significant will the single-family housing ratio become? This data raises the question of whether income will increase or if housing prices will decrease.
Data Source
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