"Last year single-family home prices continued to climb steadily back to record-high multiples of household income," reveals a blog from Peyton Whitney, an analyst at the Harvard Joint Center for Housing Studies (HJCHS), published earlier this month.
Nationwide in 2024, home prices were five times average household incomes. But in some hot spots — especially coastal communities in California and parts of southern Florida — that multiplier was eight or even higher, according to an interactive map included in the Whitney blog.
For example, in the San Jose-Sunnyvale-Santa Clara, CA, metropolitan area, homes were 12.5 times average household incomes.
Conversely, some parts of the country had much lower ratios. That's how averages work. In Enid, OK, for instance, home prices were only about twice the average income.
Why This Matters
Throughout the 1990s, the nationwide average home price was 3.2 times the nationwide average household income, according to Whitney. And that would have made an enormous difference to the affordability of homeownership, especially for first-time buyers.
Lower home prices mean lower down payments and closing costs, both of which are largely a percentage of the size of the loan you need.
Supposing your household income is $100,000 annually and you wish to buy a $320,000 home, which is 3.2 times that income. For a 3.5% down payment on an FHA loan, the payment would be roughly $2,600 per month including estimated taxes, insurance, and FHA mortgage insurance. But, if that same home now costs $500,000 (five times your household income), that payment balloons to nearly $4,000.
Winners and Losers
As in most markets, there are winners and losers in this housing market affordability trend.
Losers
As we've seen, the losers are mostly first-time home buyers, who struggle to get onto the housing ladder. This helps explain why the average age of a first-time buyer in 2024 was 38 years, up from 32 in 2004, according to the National Association of Realtors®.
Whitney's blog was based on the 2025 edition of the HJCHS's The State of the Nation's Housing report. It ran through the high costs of down payments and closing costs and continued:
"It is perhaps, then, not surprising that first-time homebuyers were older and more affluent in 2024. Nevertheless, they increasingly relied on friends and family for help covering the down payment, according to NAR’s 2025 survey of homebuyers and sellers."
Luckily, many of those friends and family are beneficiaries of the housing crisis that is hurting first-time buyers, and are in a position to help. Every cloud ...
Winners
The winners are, of course, existing homeowners. They have seen the value of their homes (and their net worth) rise exceptionally quickly.
Indeed, by the second quarter of 2025, they shared a total U.S. home equity pile of $36 trillion (yes, trillion), according to the Federal Reserve Bank of St. Louis.
CNBC reckons that means the average borrower is sitting on roughly $214,000 in equity that can be tapped. "Tappable equity is the amount most lenders will allow you to take out while still leaving 20% in the home as a cushion."
"Three out of five (32M) mortgage holders have at least $100K in tappable equity; 4.6M have at least $500K, and 1.2M have $1M or more," according to the August 2024 Intercontinental Exchange’s Mortgage Monitor.
With rates on home equity loans and home equity lines of credit falling, roughly in line with mortgage rates, homeowners are increasingly borrowing against their home equity. "First-quarter second lien equity withdrawals rose 22% year over year to nearly $25 billion — the largest first quarter volume in 17 years — suggesting increased interest in home equity access amid improving loan affordability," says the June 2025 Intercontinental Exchange’s Mortgage Monitor.
