As residential real estate enters the winter downseason, the average 30-year fixed-rate mortgage interest rate has ticked back up to 3.18% — signaling a shift from the historically low rates and sky-high demand that defined an unpredictable market during the pandemic. The one thing that has been predictable is Metro Phoenix’s rising home prices. Once known for its affordability, new research  found Phoenix is the 15th-least affordable city for housing.

READ ALSOTop 5 predictions for Phoenix residential real estate

Across the nation, the pandemic accelerated a major divide between home values and income. Though conventional wisdom suggests most home buyers offer 1% to 3% over asking price in competitive markets, low inventory and high demand drove some home buyers to desperate measures. Today, it’s not uncommon to hear of people offering far more than the seller’s asking price — with some even offering $1 million more than the listing price.

From 2019 to 2021, the average house-price-to-income ratio increased from 4.7 to 5.4 — a 14.9% increase that’s more than double the recommended ratio of 2.6. In other words, homes cost 5.4x what the average person earns in one year.

To discover how these shifts are impacting homeowners, we analyzed publicly available data from the U.S. Census, including national household income data and median new residential sales values. All dollar values are adjusted for 2021 inflation, unless otherwise noted.

We found that since 1965, average home values have skyrocketed from $171,942 to $374,900 — a 118% increase. Meanwhile, median household income crept up just 15%, from $59,920 to $69,178 in 2021-inflation-adjusted dollars.

High, inflated home values mean that fewer Americans are underwater on mortgages. But these same homeowners could be poised for disaster in the next housing crash. This is especially troubling for people who bought homes during the pandemic because they’ve had the least amount of time to pay back their mortgage.

Read on to learn more about America’s house-price-to-income ratio crisis — and how it may impact homeowners across the nation.


• Accounting for inflation, home prices have leapt by 118% since 1965, while median household income has increased by just 15%.

• Home prices have increased 7.6x faster than income since 1965 and 3.1x faster than income since 2008, accounting for inflation.

• To afford a home in 2021, Americans need an average income of $144,192 — but the current median household income is actually $69,178.

• The average house-price-to-income ratio is 5.4, more than double the maximum of 2.6 experts recommend. From 2019 to 2021, the pandemic drastically increased the average house-price-to-income by 14.9%.

• Nearly 90% of major metros have a house-price-to-income ratio that exceeds the maximum recommended ratio of 2.6.

• Just six of the 50 biggest major metro areas have a house-price-to-income ratio lower than or equal to the maximum recommended ratio of 2.6: Pittsburgh (2.2); Cleveland (2.4); Oklahoma City (2.5), St. Louis (2.5); Birmingham, Ala. (2.5); and Cincinnati (2.6).

• The least affordable metro areas for housing are concentrated in California: Los Angeles (9.8); San Jose (9.1); San Francisco (8.3); and San Diego (7.8).

• From 2015 to 2020, the percentage of homes with underwater mortgages decreased by 54% in the most populous metro areas (from an average of 12.2% to 5.6%) — likely because rising home prices increased homeowners’ equity.

U.S. Home Prices Are Soaring, but Income Has Remained Relatively Flat

House-Price-to-Income Ratios From 1965 to 2021

The American dream of steady employment and homeownership has become increasingly elusive for Gen X, millennials, and younger generations. Since 1965, home prices have increased 7.6x faster than income.

After adjusting for inflation, an average home valued at $171,942 in 1965 is worth $374,900 today — a 118% increase. By contrast, median household income has increased only 15% since 1965: from $59,920 in 1965 to just $69,178 today.

House-Price-to-Income Ratios From 2008 to 2021

Since the last major housing market crash in 2008, the average house-price-to-income ratio has grown steadily worse. Home prices have increased an astounding 3.1x faster than income since 2008.

Between 2008 and 2021, average home values soared by 25%, from $298,910 to $374,900. Meanwhile, median household income has scarcely budged, with a modest 8% increase, from $63,902 to $69,178.

The Average House-Price-to-Income Ratio Is More Than Double What Experts Consider “Healthy”

The average house-price-to-income ratio in the U.S. is 5.4, much higher than the “healthy” 2.6 experts recommend.

The current average house-price-to-income ratio means it takes prospective home buyers 5.4 years to save enough to purchase a home. These exorbitant home prices also mean monthly mortgage payments place a major financial strain on homeowners, even if they manage to save enough to purchase a home.

Low-wage service workers and those in blue-collar industries are hit hardest by high house-price-to-income ratios, according to urban economists. Although high-density, affordable housing is a promising solution, it’s one that remains elusive in many cities.

50 Biggest U.S. Metros, Ranked By Affordability


In 2021, only six of the 50 most populated metro areas in the U.S. have a house-price-to-income ratio lower than or equal to the maximum recommended ratio of 2.6:

1. Pittsburgh (2.2)

2. Cleveland (2.4)

3. Oklahoma City (2.5)

4. (tie) St. Louis (2.5)

4. (tie) Birmingham, Ala. (2.5)

5. Cincinnati (2.6)

Most Affordable U.S. Metros for Housing


Least Affordable U.S. Metros for Housing


Since 2017, Home Values Increased 2.8x Faster Than Income, on Average, in the 50 Biggest Metros in the U.S.

Home prices are outpacing income rates in America’s 50 most populated cities. Since 2017, median family income actually decreased in three major metro areas: New Orleans, Houston, and Oklahoma City. 

From 2017 to 2021, home values rose an average of 17.8% — while income increased by just an average 6.2%. In other words, home prices increased 2.8x faster than income on average.

In the Most Expensive Metros, the House-Price-to-Income Ratio Is up 61% Since 2000

In the 10 most expensive cities, the average house-price-to-income ratio leapt to 6.9 in 2021 — a 61% increase since 2000.

In 2000, the average home value was $271,707 in the 50 most populated cities. By the 2008 housing crisis, average home values had jumped to $304,589 — a 24% increase. Today, home values have increased by an additional 39% to $376,826.

By contrast, average home prices in the 10 metros with the lowest house-price-to-income ratio are 2.5x higher than income, up just 10% from the average of 2.3 in 2000.

Current Homeowners Have More Equity — Which Could Put Them Underwater in the Next Crash

Among the 50 most populous metro areas, none saw the percentage of underwater mortgages rise since 2015 — likely because skyrocketing prices actually increased homeowners’ equity.

From 2015 to 2020, the percentage of homes with underwater mortgages decreased by 54% in the most populous metro areas (from an average of 12.2% to 5.6%).

The cities with the biggest decrease in underwater mortgages include:

• Salt Lake City (1081% decrease from 18.5% to 1.6%)

• Las Vegas (513% decrease from 21% to 3.4%)

• Phoenix (471% decrease from 16% to 2.8%)

• Seattle (467% decrease from 10.3% to 1.2%)

• Tampa, Fla. (315% decrease from 16% to 3.9%)

This overlaps with our list of cities that have the lowest percentages of underwater mortgages:

• Salt Lake City (1.6%)

• Seattle (1.8%)

• Portland, Ore. (2%)

• San Jose, Calif. (2.1%)

• Denver (2.6%)

Though rising home values have helped most homeowners, some cities still struggle with high percentages of underwater mortgages, including:

• St. Louis (12.4%)

• New Orleans (10.5%)

• Memphis, Tenn. (10.1%)

• Cleveland (9.5%)

• Cincinnati (9.4%)

Overall, high home prices put homeowners at risk of going underwater on their mortgages in the next housing crash. Additionally, pricey home values are locking many prospective home buyers out of finding affordable property.


To calculate national statistics, we used median household income estimates and new residential home sale values from the U.S. Census.

To calculate house-price-to-income ratios for the 50 most populous U.S. metro areas, we used Zillow’s Home Value Index (ZHVI) to estimate home values and estimated family income sourced from the Department of Housing and Urban Development.

All dollar values are adjusted for 2021 inflation, unless otherwise noted.

Note: Family income tends to skew higher than household income because the U.S. Census includes households with no income in its averages. Therefore, our house-price-to-income ratios by metro area are likely slightly lower than they would be if we had used household income.

As a result, we advise caution when comparing national to metro statistics from these analyses.