Home prices today are 24x higher than they were in 1963, while inflation is just 10x higher, according to a new survey from Clever Real Estate, a St. Louis-based real estate company.
If home prices had kept pace with overall inflation since 1963, the median American home would cost only $177,511today — about 2.4x less than the $431,000 it actually costs.
In the last decade alone, inflation has increased 31%, while home prices are up 63% (from $264,800to $431,000). Naturally, 73% of Americans say home prices are unattainably high in their area.
Incomes have risen 3.2x since 1985, while home prices surged 5.6x during the same period. Purchasing a typical home now requires 6.3 years’ worth of household income, more than double the 3.5 years required in the 1980s.
Even more, to achieve the same affordability of homes in 1985, the median household would now need to earn $134,000 per year — nearly double today’s median of $74,580.
The root causes of this crisis are housing supply shortages coupled with the construction of larger, more expensive homes.
Of the country’s 50 largest metro areas, 14 have seen their typical home price at least triple since 2000. Miami’s home prices have increased the most (299%), while Cleveland’s have increased the least (78%).
Among states, Hawaii has seen the largest home price increases since 2000 (309%), while Louisianahas seen the smallest (86%).
Although, U.S. home prices have significantly outpaced inflation historically, inflation rose faster than home prices in 2023 for the first time since 2011. Home prices rose 2.6%, compared to a 3.3% increase in inflation.
Read the full report at: https://listwithclever.com/research/housing-inflation-2024/
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