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Home prices in the United States have been a major concern with high prices and interest rates making a home purchase out of reach for many Americans.
Table of contents
- Median Home Affordability
- USA Historical Home Price-to-Income (1984-2024)
- Hardest Time to Purchase a Home
- State-by-State Home Price-to-Income
- Most Expensive States
- Least Expensive States
How affordable are homes in the USA?
Homes in the United States have increased from the low price of $78,200 in 1984 to a median home price of $412,300 in 2024 — this is a massive increase of $334,100 with the median home price in 2024 costing more than 4 times the median home price in 1984.
Over this period the median household income has also increased from $22,420 in 1984 to $80,610 in 2024. This makes viewing the median home price as a multiple of income a good way to compare the affordability across time.
In 1984 with a median household income of $22,420 and median home price of $78,200 it would take 3.49 times the median household income to afford a home. Fast forward to 2024 where the median home price is $412,300 and the median household income is $80,610 and it now takes 5.11 times median household income to afford the median priced home.
This increase in the home price to income ratio has make purchasing a home more difficult as home prices are considered to be less affordable when compared to the household income in 2024.
If you wanted to purchase the median home price in the USA it would take a household income of approximatly $110K based on this mortgage affordability calculation. That is quite a bit higher than the median household income of $80,610.
When were homes the least affordable?
When using the home price to income ratio as a way to determine home affordability homes were the least affordable in 2022. This year had the highest median home price to income ratio of 5.93 times.
Home price to income ratio state-by-state
While the home price to income ratio for the USA was 5.11X in 2024 — there are many states that have a much higher or lower ratio. The below map shows the home price vs. income for all of the states.
Which states are considered the most expensive?
California - 8.57X
California is the most expensive with a home price to income ratio of 8.57X. Although California has a median household income of $95,521 — which is one of the highest states it also has the highest median home price of $818,900.
Hawaii - 8.22X
Hawaii is the second most expensive based on the home price to income ratio as the only other state with a ratio above 8X. The median household income in Hawaii is $95,322 compared to the median house price of $783,700.
Montana - 7.35X
While there are many states with a higher median home price than Montana — the relatively low median household income of $70,804 puts Montana in third place on a home price to income ratio comparison. The median home price in Montana is $520,400.
Which states are considered the most affordable?
Iowa - 3.37X
Iowa is the least expensive state when comparing the median home price to median household income. The median home price in Iowa is $240,800 which is one of the lowest, in addition to having median household income of $71,433.The price to income ratio in Iowa is 3.37X which is much lower than USA's 5.11X.
Illinois - 3.75X
Illinois is the second most affordable state with a median household income of $80,306 in addition to a median home price of $300,800.
North Dakota - 3.77X
North Datkota is the third most affordable state. With a median home price of $288,300 and a median household income of $76,525 — North Dakota has a home price to income ratio of 3.77X