How Housing Prices and Incomes Changed in the U.S. Between 1985 and 2025

It’s the American dream: work hard, and then be able to buy your own home. However, the numbers show that this has become increasingly unattainable across recent decades, as housing prices have outpaced income growth overall. Visual Capitalist used data from the Federal Reserve Bank of St. Louis and Motio Research to compare median sale prices of new homes to median annual incomes, and the results can be seen in the chart and graph below.

U.S. income vs. home prices, 1985 to 2025 | Visual Capitalist

Year	Household Incomes	Median House Prices	Price-to-Income Ratio
1985	$23,620	$82,800	3.5
1990	$28,838	$123,900	4.3
1995	$32,140	$130,000	4.0
2000	$40,551	$165,300	4.1
2005	$44,097	$232,500	5.3
2010	$49,578	$222,900	4.5
2015	$53,600	$289,200	5.4
2020	$68,400	$329,000	4.8
2025	$83,150	$416,000	5.0

The Data, Explained

Person using calculator in front of forms and clipboard | Kmpzzz / Shutterstock

The numbers above are not adjusted for inflation, and the graphic also does not include disposable household income or information about how monthly mortgage payments have fluctuated due to interest rates. Still, they reveal that overall, housing prices have risen more quickly than average incomes.

In 1985, the median household income was $23,620, and the median house price was $82,800, a ratio of 3.5. But U.S. household incomes have risen roughly 255% since 1985, while median house prices have grown by over 415%. In 2025, the average house price was $416,000, while the median household income was $83,730.

Factors Influencing Housing Costs Over the Years

Model house next to jar of coins | David Gyung / Shutterstock

Inflation was strong at the end of the ‘70s, meaning that mortgage rates were high in the early ‘80s. Meanwhile, the mid-2000s saw a spike in home prices that led to a housing bubble and then a crash, which helped create the Great Recession. After this, the Federal Reserve lowered interest rates, and mortgage rates also fell.

In more recent years, the demand for housing has increased along with home prices. The affordability gap widened even further after the pandemic, with home prices rising from $329,000 to $426,800 while incomes rose from $68,400 to $83,730. As construction of new homes has slowed and demand for them has risen, prices have spiked even further.

These are median numbers that do not capture the lower and higher ends of the spectrum. The bottom 20% of U.S. households earned $34,150 or less in 2024. Meanwhile, the minimum annual income to even enter the top 1% of the U.S. in 2025 was $787,712 that year. Connecticut required over $1 million to enter the top 1% of earners there.

Housing costs and incomes also vary wildly across states and locations. In Los Angeles, for example, the median home price was 12.5 times higher than the median annual household income in 2024, while in New York, that number was 9.8. In general, coastal areas saw higher home-to-income ratios.