Americans Can Barely Afford Homes - Just How Bad Is It?

Wage inflation adjusted home affordability crisisImagine taking a trip down memory lane to explore how the dream of homeownership has evolved over the decades in the United States.

Our journey begins in 1971, a time when bell-bottoms were in fashion, and the average American family aspired to own a piece of the American Dream – a home.

US Home Affordability Tracker

This graph plots US home affordability by adjusting mortgage payments with wage inflation since 1971, adjusting all payments to 2015 dollars.

This graph plots US home affordability by adjusting mortgage payments with wage inflation since 1971

The red line in the graph plots the US median home price while the blue line plots the monthly mortgage payment (principal and interest portion) adjusted with inflation to 2015 dollars, meaning that all payment points on the graph evaluate monthly mortgage payments compared to the affordability experienced in 2015.

The Story Behind the Numbers:

1971 - A Promising Start: In 1971, our graph shows us that the monthly mortgage payment on the median-priced home was quite affordable, consuming a modest portion of the median household income. The economy was different then, and it was a time of optimism for prospective homeowners. By the end of the 1970s though, home payments had moved 88% higher!

The 1980s - A Challenge Arises:  Something notable happens as we move into the 1980s. Mortgage payments continue to climb relative to income. The era of big hair and Reaganomics brought with it higher interest rates (often well above 10%), making homeownership a bit more challenging. The graph tells us that buying a home was a more substantial financial commitment for many families and, often, out of reach.

Keep Up With New Trends In Tallahassee!

Get The Tallahassee Real Estate Newsletter

Subscribe to the Tallahassee Real Estate Newsletter for updates on home sales in Tallahassee, FloridaDon't be the one that doesn't know what's going on when you sell a home or buy a home in Tallahassee.

Other buyers, sellers, lenders, and real estate agents have this critical information, and now you can too!

Get immediate access to our most recent newsletter.

Let more than 30 years of experience work for you with charts, graphs, and analysis of the Tallahassee housing market.

1990s - A Time of Recovery: The 1990s brought a more positive turn. Mortgage payments, though still significant, became relatively more manageable. Lower interest rates and a strong economy made homeownership more attainable for the average American family.

Early 2000s - The Boom and Bust: The early 2000s, marked by the dot-com bubble and later the housing bubble, tell a dramatic story. Mortgage payments jumped as housing prices surged. The dream of homeownership seemed to be slipping away for many as affordability reached its lowest point in decades, but once the housing bubble burst, mortgage payments nearly set a 50-year low.

Post-2010 - Recovery and Beyond: Fast forward to the post-2010 era, and we see a gradual improvement in affordability. Mortgage payments, while still significant, began to stabilize. The economy rebounded from the financial crisis, and interest rates remained historically low. Mortgage payments moved higher, but remained below the level recorded in the 1990s.

2015 - A New Baseline: 2015 is a pivotal year. It's the year we set as our baseline with an index of 100 for wage inflation adjustment. From this point onward, our graph illustrates how monthly mortgage payments compare to the affordability experienced in 2015. The slashing of mortgage interest rates kept affordability for the first twenty years of the millennium below all years since the 1970s, but home builders did not resume normal production levels to keep pace with a growing population.

2023 - The Present Day: Our journey concludes with the present year, 2023. As we look at the most recent data point on the graph, we can assess whether the dream of homeownership has become far less attainable compared to 2015. This final point reflects an estimate of the most current economic conditions and housing market trends.

Hey Politicians We Need More Houses!!!
We need more houses! As our cities grow, so does the demand for housing. But the supply? It's not keeping up
Americans Can Barely Afford Homes - Just How Bad Is It?
People have asked: “Is home affordability really all that bad?” Give me five minutes, and you’ll have the answer and the data that supports it.
Can Builders Save The Housing Market?
Home Affordability Crisis: Local Solutions ~ National Issue: Delving deep into current US homebuilder production. Enough? Short? A less optimistic real estate market outlook.
The Unaffordable Housing Paradox: Why Homes Are Out of Reach
The affordable housing shortage has this solution. It requires changes in urban planning that pay attention to housing costs and housing economics.
Why Foreclosures 2023 Is Not The News Story They Told You It Would Be
Even as more videos mount clickbait based on foreclosures coming, the data invalidates them right away.
Are Home Prices Heading for a Crash?
The US housing market has been a frequent topic in the news, but a crucial factor is being ignored when determining the direction of US home prices.
The Fallacy of Affordable Housing: The Need for More Homes
The idea of affordable housing is noble, but the reality is that building new low-end homes is not the solution to the housing crisis we're facing.
Foreclosure Crisis: What the Data Tells Us
Are you curious about what's really going on with foreclosures and loans in forbearance? Worried about the next housing crash?
Are you a NIMBY or a YIMBY?
Two terms have gained prominence over the past few years. NIMBY (Not In My Back Yard) and YIMBY (Yes, In My Back Yard) are labels that classify housing market activists into one of two camps
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Real Story Behind Home Prices: Fact Versus Fiction
When it comes to buying a home, many misconceptions about the housing market can cause confusion and uncertainty for potential homebuyers. One of the most persistent myths is that home prices fall frequently, but is this true?
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Big Redfin Report: First Time Redfin Saw THIS Since 2012!
Recent housing market data from Redfin, the large online real estate portal, shows that something occurred over the past two months that has not happened in the past ten years.
Will Assumable Mortgages Save Housing?
Will assumable mortgages save housing? Home affordability is becoming one of the hottest topics in the economy, but I was recently asked if assumable mortgages might bring some relief to homebuyers. This video shares what I think about how mortgage assumption will impact housing.
Why Vacancy Rates Are the Hidden Indicator of Housing Market Health
Imagine shopping for a new home—whether you're aiming to buy or rent—and finding that every other house on the block is empty. Conversely, imagine a tight market where you can't even find a rental property, let alone purchase a home.
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
Will NINJA Loans Bring Down The Housing Market?
Housing Crash Coming? If you remember back to the housing bubble, we saw the growth of "NINJA" loans, as they were a segment of the home sales explosion.
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.

Home Affordability Approaches 53+ Year Low

The graph provides a compelling visual representation of the historical evolution of monthly mortgage payments on median-priced homes, meticulously adjusted for wage inflation. It sheds light on the enduring challenges and opportunities that successive generations of Americans have encountered while pursuing homeownership and serves as a poignant reminder of the profound influence that economic conditions, interest rates, and housing market dynamics wield over the affordability of residential properties.

Remarkably, today's prospective homebuyer finds themselves within a mere 1.05% of the highest wage-inflation-adjusted mortgage payment recorded since 1971, and likely for many years prior. The persistent scarcity of available housing continues to exert upward pressure on both home prices and rental rates. Consequently, there is growing apprehension that this trend may persist due to insufficient new home construction.

As we navigate this journey through the annals of housing affordability, our collective hope remains anchored in the vision of a future where homeownership remains a feasible aspiration for all, regardless of the ever-shifting economic currents. However, realizing this brighter future necessitates addressing the fundamental catalyst of soaring prices.

It is imperative to recognize that, like any other commodity, the housing market adheres to the principles of supply and demand. Herein lies the crux of the issue: a glaring supply-side challenge precipitated by the burgeoning bureaucratic complexities embedded within the home-building and development processes within our local housing markets.

Our duty now is to amplify our voices so that elected officials prioritize the pressing matter of home affordability. The path forward hinges upon our collective commitment to redress the supply-side impediments that have hitherto thwarted the dream of homeownership for countless Americans.

Zillow Home Affordability Tracker
The new Zillow Home Affordability Tracker from the giant in the real estate domain was recently unveiled as an innovative tracking tool that offers fresh insights into US home affordability
What 'normal' has meant over the years - Understand where rates are going
Watch through the end and you'll understand when mortgage interest rates return to normal.
Americans Can Barely Afford Homes - Just How Bad Is It?
People have asked: “Is home affordability really all that bad?” Give me five minutes, and you’ll have the answer and the data that supports it.
Home Affordability: Can New White House Plan Fix Housing?
The White House rolled out a home affordability plan: Is this a genuine blueprint to fix housing, or just another set of promises floating in the political winds?
Will Robert F. Kennedy, Jr.'s Plan Work?
Robert F. Kennedy, Jr. presented his plan to fix the affordable housing crisis by creating a housing boom. Do the facts underpinning his promises hold water?
Foreclosure Crisis: What the Data Tells Us
Are you curious about what's really going on with foreclosures and loans in forbearance? Worried about the next housing crash?
Big Redfin Report: First Time Redfin Saw THIS Since 2012!
Recent housing market data from Redfin, the large online real estate portal, shows that something occurred over the past two months that has not happened in the past ten years.
Hey Politicians We Need More Houses!!!
We need more houses! As our cities grow, so does the demand for housing. But the supply? It's not keeping up
Are Home Prices Heading for a Crash?
The US housing market has been a frequent topic in the news, but a crucial factor is being ignored when determining the direction of US home prices.
How Bad Is It? SHOCKING Building Permits Report!
The lack of home affordability has become a widely discussed issue in the media - the shortfall in new single-family home permits and multi-family property permits and construction exacerbates the current housing crisis.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
The Unaffordable Housing Paradox: Why Homes Are Out of Reach
The affordable housing shortage has this solution. It requires changes in urban planning that pay attention to housing costs and housing economics.
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
7 Critical Graphs Zillow Decodes US Housing Market Complexities
If you've ever wondered why home prices are skyrocketing or why your dream home feels increasingly out of reach, Zillow’s report is your roadmap.
Zillow Housing Market Update
Zillow data unveils the great twists & turns shaping US housing trends, shedding light on the challenges and opportunities ahead.
Zillow Drops Bombshell Real Estate Update
You won't want to miss the latest data release from Zillow. They've just dropped a bombshell of a report that will significantly impact the housing market.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
Why Foreclosures 2023 Is Not The News Story They Told You It Would Be
Even as more videos mount clickbait based on foreclosures coming, the data invalidates them right away.
Can Builders Save The Housing Market?
Home Affordability Crisis: Local Solutions ~ National Issue: Delving deep into current US homebuilder production. Enough? Short? A less optimistic real estate market outlook.
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Market Equilibrium, How The Balance Has Changed In Real Estate
The way we estimate housing market equilibrium has changed, and with it, the way the market is evaluated must change.
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
New Home Construction Report
Kevin Erdmann Housing Update September 2022 - Explains the new home construction pipeline and what to know about the number of homes being built in the US.
Unlocking Zillow's Latest Housing Trends And Forecasts
Zillow has shared its extensive data that we have used to generate our monthly housing market update. Zillow reports this right now:
Zillow Exclusive: 5 Charts on the US Housing Market You Can't Miss!
Zillow has just released new data that provides valuable insights into the changes taking place in the real estate industry.
Why Vacancy Rates Are the Hidden Indicator of Housing Market Health
Imagine shopping for a new home—whether you're aiming to buy or rent—and finding that every other house on the block is empty. Conversely, imagine a tight market where you can't even find a rental property, let alone purchase a home.
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
Are Wages Keeping Up With Rising Home Prices
Home prices are rising. Mortgage interest rates are rising. Are people earning enough money to buy homes today, or is the home affordability crisis getting worse?
Zillow Housing Market Update
In this must-watch video, we delve into the roller coaster ride that is the real estate market. Discover the latest insights and trends from Zillow.
Zillow - Surprising Home Sales Report
Zillow has something to say about the housing market. Zillow's data suggests something else is happening. And it’s not just Zillow.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
REDFIN Reports Falling Home Prices?
Does the latest Redfin real estate report show home prices falling? I reviewed the Redfin real estate data, but did I find home prices dropping?

There are a lot of people who endorse Joe for the job of selling your home, from Barbara Corcoran (Star of ABC's Shark Tank) to Preston Scott (host of Tallahassee's top daily "Audio Magazine," as well as the thousands of happy customers Joe has helped in the past. Listen why!

Post a Comment

(850) 378-5727