Unaffordable Housing: Housing Costs Race Ahead

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Market Trends

There is a growing disparity in American’s housing market. While housing prices are soaring, people’s ability to pay those rising prices is not. Our team of industry analysts found that over the last decade, the median price of a home is up nearly 70%. The median income, however, is up less than 30% over the same time period. In dollars, that’s a $129,000 increase in housing costs compared to a $14,695 increase in income.

Key findings:

Nevada, Idaho and Arizona have the largest disparities between housing costs and income.
Louisiana, Delaware and New York are the only states that saw wages rise faster than housing costs.
Median home prices increased from $33,000 to $330,000.
Median income increased from $5,000 to $27,000.
Our analysts looked at housing and income data going back to 2012. Housing costs and income varied significantly from state to state. But in almost every state, housing costs grew far faster than income. The column on the far right shows just how much housing costs have outpaced wage growth in each state. The rankings, however, are based on the percentage point difference between the rise in housing costs and median income.

Housing vs. income
Rank
State
Change in median income since 2012
Change in median home price since 2012
Difference between median income and home price in percentage points
Difference between increase in housing costs and increase in wages
1
Nevada
31.6%
150.4%
118.8
$275,724
2
Idaho
27.3%
145.9%
118.6
$298,001
3
Arizona
31.9%
131.2%
99.3
$256,945
4
Washington
26.5%
116.3%
89.8
$399,313
5
Michigan
19.1%
102.3%
83.1
$136,416
6
Utah
29.9%
109.2%
79.3
$332,220
7
Florida
20.8%
99.3%
78.5
$217,340
8
Oregon
29.5%
99.5%
70
$341,942
9
California
41.1%
108.2%
67.1
$554,560
10
Colorado
34.7%
100.4%
65.7
$371,873
View all rowsPercentage points hide the true increase in the rising cost of homes. We found that since 2012, prices have gone up anywhere from $33,000 to 330,000. The largest increases in housing costs are found almost exclusively in the western half of the United States.

Where housing costs are rising fast
Rank
State
2012 median price
2021 median price
Change in median price (%)
Change in median price ($)
1
Nevada
$135,000
$338,000
150.4%
$203,000
2
Idaho
$146,000
$359,000
145.9%
$213,000
3
Arizona
$138,000
$319,000
131.2%
$181,000
4
Washington
$221,000
$478,000
116.3%
$257,000
5
Utah
$195,000
$408,000
109.2%
$213,000
6
California
$305,000
$635,000
108.2%
$330,000
7
Michigan
$96,896
$196,000
102.3%
$99,104
8
Colorado
$224,000
$449,000
100.4%
$225,000
9
Oregon
$205,000
$409,000
99.5%
$204,000
10
Florida
$137,000
$273,000
99.3%
$136,000
View all rowsSo with the rise in housing costs, just how long would it take you to pay for the median home in each state? With no other expenses, it would take you around two and a half years to pay for the median home in West Virginia and eight and a half years to pay for the same home in Hawaii.

Change in median income since 2012
State
2012 median income
Current median income (most recent available as of Feb. 2021)
Change in median income (%)
Change in median income ($)
Years it would take to pay for a home at current price
New York
$47,680
$72,108.00
51.2%
$24,428
4.9
Hawaii
$56,263
$83,102.00
47.7%
$26,839
8.3
Delaware
$48,972
$70,176.00
43.3%
$21,204
4.1
California
$57,020
$80,440.00
41.1%
$23,420
7.9
North Carolina
$41,553
$57,341.00
38%
$15,788
4.0
Massachusetts
$63,656
$85,843.00
34.9%
$22,187
5.6
Colorado
$57,255
$77,127.00
34.7%
$19,872
5.8
Illinois
$51,738
$69,187.00
33.7%
$17,449
3.2
Ohio
$44,375
$58,642.00
32.2%
$14,267
2.9
Arizona
$47,044
$62,055.00
31.9%
$15,011
5.1
View all rowsPerhaps the most shocking statistic of all, though, is that despite record unemployment and a global pandemic, housing prices rose 10.2% in 2020. The possibilities of remote work could give people a chance to leave high-priced states like California, but as we have seen, this only increases prices in states like Idaho. Owning a home is supposed to be part of “The American Dream.” The question is, is this still a reality for most Americans?

Methodology:
To find which states have the largest disparities between income and housing costs, we looked at median home costs on Zillow, Inc. from 2012 to 2021. Median income per household data from 2012 to 2021 was compiled from the U.S. Census Bureau.

States are ranked on the disparity between the rate increase of the median household income from 2012 to 2019 and the difference in median home values from 2012 to 2021. States ranked closer to 1 have a greater disparity between median house value and income.