The Rising Cost of Homeownership in the U.S.: A 5-Year Perspective
- League of Veterans NPO
- Feb 27
- 2 min read
The Rising Cost of Homeownership in the U.S.: A 5-Year Perspective
Over the past five years, the cost of purchasing a home in the United States has skyrocketed, leaving many prospective buyers struggling to keep up. From 2019 to 2024, the income required to afford a median-priced home has more than doubled, reflecting the significant challenges facing the housing market today.
How Much Has the Required Income Increased?
In 2019, a household needed an annual income of approximately $59,000 to afford a typical home. Fast forward to 2024, and that number has surged to around $120,000—an increase of over 100%. This dramatic rise is primarily driven by escalating home prices and higher mortgage interest rates, making homeownership increasingly unattainable for many Americans.
Income Growth vs. Home Prices
While home affordability has plummeted, median household income has not kept pace. Between 2019 and 2024, median household income in the U.S. grew from $66,000 to $84,000, an increase of just 27%. This stark contrast highlights the widening affordability gap, as home prices continue to outstrip wage growth at an alarming rate.
The Impact on Home Buyers
The disparity between income growth and rising housing costs has led to several consequences:
Decreased Homeownership Rates: Many Americans are finding it increasingly difficult to qualify for mortgages, forcing them to remain renters longer.
Shifting Housing Trends: More people are moving to less expensive regions in search of affordable housing options.
Increased Financial Strain: Higher mortgage payments, combined with rising insurance premiums and property taxes, are stretching household budgets thin.
Looking Ahead: What to Expect in 2025
As of early 2025, housing affordability remains a major concern. While mortgage rates have fluctuated, home prices continue to remain high, keeping the required income for homeownership beyond reach for many. Unless there is a significant shift in market conditions—such as a reduction in home prices or a substantial increase in wages—this affordability crisis is likely to persist.
For aspiring homeowners, staying informed about market trends and exploring financial assistance programs may provide some relief. In the meantime, the dream of homeownership remains elusive for a growing number of Americans, highlighting the urgent need for policy changes and market adjustments.
Renting is Cheaper Than Buying in All But Two Major Cities
Zillow’s Housing Market Predictions for 2025
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