As housing prices have skyrocketed across the country, young Americans have felt the dream of homeownership quickly fading. But as Millennials and Generation Z expressed their frustrations, older Americans responded, suggesting that buying a house years ago was just as expensive.
This exchange has caused a generational clash, causing tensions and passionate debates between both parties, and to resolve the debate, RealtyHop dug into the data to determine whether housing is really more expensive for younger Americans today.
For this, the real estate company consulted statistics from the most recent 2022 US census and compared them with the same figures from the 1970 census, when Baby Boomers were starting to buy starter homes. It also compared RealtyHop’s own data, taken from more than 4 million properties for sale in 2023, to show a more recent picture.
Key results of the study:
· Housing Across America Is Much Less Affordable Now compared to when previous generations bought their first home, even when adjusting for household income.
· All US states saw their housing multiple increase (how many years of income it would take to buy a house) since 1970.
· Hawaii had the highest housing multiple with 6.85, 125% more than in 1970.
· California had the largest percentage increase in housing multiple since 1970. That state saw its housing multiple rise from 2.15 in 1970 to 6.28 in 2022, meaning it’s nearly three times more expensive to buy a home now, even after adjusting for changes in income.
· If you look at the United States as a whole, the housing multiple increased from 1.77 in 1970 (9,586 median household income, median owner value $17,000) to 3.04 in 2022 (92,646 median household income, median owner value $281,900), an increase of 72%. In fact, every US state saw an increase, from Mississippi at 21% to California at 192%.
How 2023 affected housing affordability
While census data has not yet been released for 2023, RealtyHop believes it was important to include an analysis with updated prices, given the dramatic increase in home prices last year.
Using the real estate agency’s own data, from more than 4 million sales listings in the last 12 months, as well as adjusted median household income, RealtyHop detected an equally serious situation. Hawaii currently has the most unaffordable housing in the country, with a housing multiple of 6.55followed by California with 6.27 and Montana with 5.73.
These statistics give further support to the current real estate crisis in these areas. Even North Dakota, the state with the lowest housing multiplestill recorded housing costs greater than 2.5 times the median annual household income.
To view the full report and its methodology, enter here.
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2024-02-29 14:21:59
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