Home prices are rising faster than wages
The cost of homes in the United States has outpaced wage growth over the past decade. According to the Federal Finance Housing Agency, home prices rose 74% from 2010 to 2022. The average wage rose only 54% during the same time.
Some parts of the country have even larger gaps between wages and home prices. Prices in Texas, Florida, and most of the western US rose more than twice as fast as wages. In Nevada, for example, home prices rose 162% from 2010 to 2022, while wages rose 47%.
The map above displays how wages and home prices have changed over time. The comparisons shift depending on the dates chosen, and how a county recovered from the 2007–2008 housing bubble. Choose a new year to see how the map changes with a different starting point.
Since 1990, wages and home prices have followed fairly closely, though home prices have since outstripped pay in states like Colorado and Oregon.
Since 2008, wages have typically grown faster than home prices. In some parts of Illinois, for example, home prices have changed little since 2008, while wages have continued to rise.
In the most recent comparisons, however, home prices outpace wages. They accelerated faster than wages during the pandemic in nearly every county in the United States.
Search below to see the detailed yearly comparison for a state or county.
Where are homes affordable now?
Affordability depends on several things, including the home’s cost, a family’s income, interest rates, and other factors. Lenders usually require mortgage payments to be less than 28% of gross income.
In most of the western US and almost every predominantly urban county, a single average earner couldn’t afford to buy a median-priced home in their county in 2022. One in nine Americans lives in a county where two average earners could not afford the median home.
The map below measures affordability by the share of wages an average earner would spend on a median home’s mortgage at 2022 interest rates with a 10% down payment. Lower figures mean a county is more affordable. By this measure, Illinois and West Virginia have some of the most affordable homes.
What is the median home price by state?
West Virginia had the nation’s lowest median home price in 2022, based on data from the 2021 American Community Survey and the Federal Housing Finance Agency (which tracks the change in prices across homes that have sold more than once). West Virginia also had some of the lowest average wages in the country. The average earner made around $54,000, while the median home cost about $160,000.
Conversely, in high-earning Massachusetts, the average earner made about $86,000, while the median home cost around $540,000.
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Sources & Footnotes
- Bureau of Labor Statistics
Quarterly Census of Employment and Wages
March 8, 2023
- Federal Housing Finance Agency
Annual House Price Indexes - Counties (Developmental Index; Not Seasonally Adjusted), Annual House Price Indexes - States (Developmental Index; Not Seasonally Adjusted)
March 28, 2023
- United States Census Bureau
American Community Survey - DP04 | Selected Housing Characteristics
September 15, 2022
- Freddie Mac
30-Year Fixed Rate Mortgage Average for 2022 in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis
Mar 23, 2023