Home prices far outpace paychecks in many areas: Research
As the cost of homes continues to jump, new research has found those price tags are far outweighing the average household income in many areas.
New research from Harvard’s Joint Center for Housing Studies found that the costs of single-family homes in 2023 were about 4.9 times the median household income, putting homeownership out of reach for many families. The researchers released an interactive map that shows where the price-to-income ratio was the highest and lowest last year.
Single-family homes across many parts of southern California were at least eight times more expensive than the median household income there. Other parts of California, many areas in Florida and the New York City metropolitan area had home prices at least five times the median household income.
Some parts of New England, including the Boston area, also saw home prices five to eight times the median household income.
The research also found that U.S. homeownership only increased by 0.1 percent in 2023, which was the smallest increase since 2016. The research found that there is still a racial disparity in homeownership, especially for Black and Hispanic households.
In the first quarter of 2024, the Black homeownership rate was at 46.6 percent while he Hispanic homeownership rate was at 49.9 percent. This is much lower than the white homeownership rate, which stood at 74 percent.
“Households of color face other disadvantages, too,” Daniel McCue, a senior research associate at the Center, said in a statement. “Whether it’s the high downpayment or the monthly mortgage payments, the costs of buying a home have left homeownership out of reach to all but the most advantaged households.”
Rent prices also remain high in 2024, as they are up 26 percent nationwide from early 2020. The research also found that about half of renters spent more than 30 percent of their income on housing and utilities in 2022.
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