Housing affordability: the price didn't change, the payment did

Key takeaways

The median American home cost 5.49 years of median household income in 2023, exactly what it cost in 2021. Affordability still collapsed, because the financing changed: the 30-year mortgage rate averaged 2.96 percent in 2021 and 6.80 percent in 2023.
The payment tells it plainly. A median-priced home bought with 20 percent down took 22.1 percent of the median household's income in 2021 and 34.3 percent in 2023. The house cost the same share of income; the loan on it took half again as much.
For buyers this reframes the wait: a fall in prices alone will not restore 2021 affordability. At a 6.8 percent rate, prices would have to fall about 35 percent to match the 2021 payment share, which makes the rate the decisive variable.

What's happening

The left panel divides the median home sale price by median household income: how many years of income the median home costs. The right panel is the 30-year mortgage rate. The ratio climbed from 4.45 years of income in 2010 to a peak of 5.79 in 2022, then eased to 5.49 in 2023 as incomes caught up a little. That is the same 5.49 as 2021.

The rate line is what moved. Through the 2010s it stayed between 3.6 and 4.7 percent; in 2021 it averaged 2.96, the cheapest in the series. By 2023 it averaged 6.80, and it has stayed near that level since: 6.54 percent in July 2026.

34.3%

The share of median household income taken by the mortgage payment on a median-priced home in 2023, with 20 percent down on a 30-year loan. In 2021 the same calculation took 22.1 percent. The price-to-income ratio was 5.49 in both years.

The same house, a much bigger payment

In dollars: the 2021 median home at $383,000, financed at 2.96 percent with 20 percent down, carried a principal-and-interest payment of about $1,285 a month. The 2023 median home at $426,525, financed at 6.80 percent, carried about $2,224. The house got 11 percent more expensive; the payment got 73 percent more expensive.

That split divides the market into two populations. Owners who locked low rates hold payments priced off the old line and have little reason to sell, which keeps supply tight. Buyers price off the new line, where the income share is a third rather than a fifth. Both are responding rationally to the same chart.

What the chart shows

The ratio's climb was slow and structural: 4.45 in 2010, above 5 by 2013, mostly sideways near 5.3 through 2018. The pandemic years compressed a decade of drift into two: the median sale price went from $320,250 in 2019 to $432,950 in 2022. Incomes rose too, from $65,712 to $74,755 over the same stretch, which is why the ratio peaked at 5.79 rather than higher. What the 2010s never had was expensive money on top of expensive houses; 2022 was the first year in this window with both.

What to watch

Three lines settle where this goes. The mortgage rate, at 6.54 percent in July 2026, tracks the 10-year Treasury, and the Fed's cuts have not moved it. The median sale price has softened from its peak, $410,700 in the second quarter of 2026 against $442,600 at the 2022 high. And the income figure updates once a year: the Census Bureau's 2024 release will extend the ratio line and show whether the easing from 5.79 continued.

Common questions

How many years of income does a house cost in the US?

5.49 years of median household income for the median home in 2023: $426,525 against $77,719. In 2010 it was 4.45 years.

Why did housing affordability get so much worse after 2021?

The financing, more than the price. The price-to-income ratio was 5.49 in both 2021 and 2023, but the 30-year mortgage rate went from an average of 2.96 percent to 6.80. The monthly payment on a median home rose about 73 percent between those years.

What share of income does a mortgage take?

On a median-priced home with 20 percent down and a 30-year loan, principal and interest took 34.3 percent of median household income in 2023, against 22.1 percent in 2021 and roughly 21 to 26 percent through the 2010s.

Are home prices falling?

The median sale price has come off its peak: $410,700 in the second quarter of 2026, against a 2022 high of $442,600. Relative to income, the ratio eased from 5.79 in 2022 to 5.49 in 2023.

Data: median sales price of houses sold (FRED series MSPUS, quarterly, through Q2 2026), 30-year fixed mortgage average (FRED, weekly, through July 2026), and median household income (US Census Bureau, American Community Survey table B19013, annual, 2010 to 2023; the 2020 survey was not released to standard, so that year is absent), as published in the Kitegraph library. The chart aggregates to yearly averages; the ratio line ends at 2023, the latest income year. Payment figures assume 20 percent down and a 30-year fixed loan, principal and interest only.