Housing Prices vs. Household Income

The graph shows household income from 1967 and comparison of median single family dwelling value, adjusted for inflation, in 2023 dollars.

Combined, the US Treasury printing money and the Federal Reserve doing a horrible job of managing interest rates lies below both of these charts.

Back in 1970, the typical new home cost just 3.2 times the median income. By 2004, that ratio had breached 5x for the first time, and it has rarely dipped below 5 since the Great Financial Crisis. In 2022, the ratio peaked at 5.83—an all-time high.

A 2022 OECD (Organization for Economic Co-operation and Development) study of 28 countries found the U.S. had the third lowest percentage of households that owned their homes “free and clear” with no mortgages, as “outright owners.”

Free-and-Clear Homeownership Rate of Households

Lithuania = 83%

Slovak Republic = 69%

Hungary = 68%

Slovenia = 68%

Poland = 66%

Greece = 63%

Latvia = 61%

Italy = 60%

Estonia = 57%

Japan = 48%

Spain = 48%

Chile = 45%

Ireland = 43%

Portugal = 43%

Luxembourg = 42%

Korea = 41%

France = 37%

Belgium = 35%

Finland = 34%

United Kingdom = 33%

New Zealand = 32%

Austria = 30%

Australia = 29%

Canada = 28%

Germany = 27%

United States = 23%

Denmark = 11%

Netherlands = 9%