It’s uncomfortable to sit with the number that keeps coming up in discussions about housing in America. The average American household makes about $83,700 annually. Depending on the market you’re in and the metric you use, the median home costs five to eight times that amount. That ratio rises above ten in the priciest metro areas, such as San Jose, Los Angeles, and New York. It’s difficult to ignore the fact that these are no longer edge cases. The map is them.
A typical American family could purchase a home in 1985 for roughly 3.5 times their yearly income. It was math that worked, but it was never exactly simple. You stretched, you bought, and you saved. When that ratio surpassed five by 2005, discussions about a bubble began. The bubble burst. Prices decreased. Everyone also harbored the belief that this was a correction and that affordability would eventually return.
It didn’t. Instead, a pandemic-era boom caused median home prices to rise by almost 48% between 2019 and 2024, while median incomes increased by only 22%. The gap that was meant to close continued to grow. Price-to-income ratios are now higher than five in 39 of the 100 largest metro areas in the nation, according to data from Harvard’s Joint Center for Housing Studies. That figure was fifteen in 2019. Here, the direction of travel is clear.
When the cost of a house is eight times your yearly income, what breaks? It turns out to be quite a bit. First-time buyers are priced out before they’ve even started because they’re already dealing with student loan debt, growing rent, and the psychological burden of uncertainty following the pandemic. Even a modest ten percent down payment on a median home amounts to nearly a year’s worth of gross income. That isn’t a savings objective. If nothing else goes wrong, that project will take ten years to complete.
Additionally, communities themselves are experiencing something more subdued. Price-to-income ratios are still below three in places like Toledo and Akron, and it seems like people are starting to notice this—really notice it—in ways they weren’t five years ago. Geography is now more negotiable than it has ever been due to remote work, and some families are choosing to leave coastal cities based solely on math rather than personal preference.
However, it’s unclear if migration by itself will provide a solution. Metro areas with high demand have not significantly loosened their restrictions on housing supply. New inventory is still being slowed by local politics, building costs, and zoning regulations. Due to their low-rate mortgages from 2020 and 2021, current homeowners have little motivation to sell, resulting in a kind of frozen market where prices stay high because so few properties are actually moving.
It’s remarkable how commonplace this has become. In 1995, discussing a house that cost eight times your income would have seemed excessive. It looks like a Tuesday afternoon statistic today. The most illuminating aspect of all may be that normalization, which reveals not only what is wrong with the housing market but also what people have quietly stopped anticipating from it.
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