Housing is expensive. Of course, people have always thought that, especially when they're buying their first home.
But today, housing is more expensive than in living memory — maybe than ever before. And on Sunday, The New York Times' editorial board not only described the current affordability issues facing homes but also suggested ways to mitigate them.
Housing Is Expensive — Objectively
It's hard to compare costs in different decades. Over the long term, inflation pushes up all prices. But some rise more quickly than others.
Perhaps the most effective way to make a comparison for real estate is to compare the median home price in the United States at a particular point with the median annual household income at the same time. And that's what The New York Times did.
In 1950, the median home price was 2.5 times that of the median income, says The Times. Most young families could at least consider buying their own home.
By 1985, housing had become more expensive. But it was still within the reach of many. The median home price was 3.1 times that of the median income.
Remember that when boomers (this writer is one) give lectures about how hard it was to afford a home in their day. They're not lying. It was hard at the time. But it was nothing like as challenging as now.
In 2025, the median home price was 4.9 times that of the median income. And that's a national average. Someone buying in a real estate hotspot will pay much more:
- In San Francisco, the median home price in 2025 was 12.4 times that of the median income
- In Honolulu, 10.8 times
- In Los Angeles, 9.6 times
- In New York City, 9.5 times
- In Miami, 8.7 times
The Times noticed a pattern. All these are coastal cities with thriving economies but low construction rates.
Construction Is Key to Housing Affordability
Sometimes, construction in cities is constrained by geography. It's not economically viable to build extensively beyond existing boundaries because there's a river, the sea or a mountain range in the way.
But often the cause is man-made. Local zoning laws frequently allow only single-family homes to be built.
However, when land availability is limited, cities need areas of high-density housing. From condos, co-ops, and apartment buildings in tower blocks to small, 4-unit multifamily homes, being able to house a lot of people on a relatively small plot is efficient.
And it makes a big difference to both reducing housing scarcity and moderating costs in both the sale and rental markets. The Times pointed to Austin, Texas, as a good example of a city expanding its housing stock while keeping housing costs affordable.
The Austin Phenomenon
"Over the past decade, Austin has broken ground on 140 homes for every 1,000 households, compared with only 22 in San Francisco, 23 in New York and 27 in Boston," said The Times. "Austin’s construction boom is one reason that, even as the local population has grown, home prices have fallen 13 percent in the past several years, and rents have fallen, too. The new developments include a 66-story downtown skyscraper known as 6G, which is the city’s second-tallest building, and Easton Park, a suburban-style community where two-bedroom homes can sell for less than $325,000."
Some readers might have spotted the problem there. Homeowners don't want home prices to fall or for things to change much in their cities. And homeowners vote more than other population groups, something of which local politicians and zoning officials are acutely aware.
However, cities where housing is expensive can ultimately be harmed economically by high home prices and rents. Young people may feel they can't take jobs in them, while local kids might be inclined to relocate to less costly places when they enter the job market.
True, Austin isn't perfect. The median home price there in 2025 was 4.6 times that of the median income, which isn't cheap.
But it's a lot more attractive to most job seekers than the cities listed above. And its home prices are heading in the right direction, at least for first-time home buyers.
The Need to Build More Homes
Realtor.com estimated in March that the United States has 4.03 million too few homes. In April, the White House put the shortfall at 10 million.
Either way, the U.S. needs a lot more homes than it has. And new construction surely has to be the most effective way of delivering these.
However, there's no point in building where nobody wants to live. There need to be jobs available, and cities are where most of those are.
So, cities are where the biggest changes need to happen. And changes to zoning laws that allow high-density housing in some areas and manufactured homes in others would be a great start.
This isn't necessarily a pipe dream. "Some places are moving in this direction. In 2019, Oregon became the first state to pass a law effectively ending single-family zoning," says The Times. "Several other states, including Maine and Washington, have since passed similar laws." Let's hope more are on the way.
