Short answer. The U.S. home-price-to-income ratio reached 5.4× in 2024 — the highest reading on record. The 56-year average is ~3.2×; the 2005 cycle peak was 4.2×.
Price-to-income is the cleanest single measure of U.S. housing affordability. It's computed as median existing-home price / median U.S. household income.
Selected readings
- 1985: 2.4× (most affordable)
- 1990: 2.9×
- 2000: 3.1×
- 2005: 4.2× (subprime cycle peak)
- 2011: 3.0× (post-crash low)
- 2019: 3.9×
- 2021: 5.1×
- 2024: 5.4× (all-time high)
Why it matters
Historically, when price-to-income exceeds 4×, either incomes need to grow into prices (long, slow process) or prices need to compress (faster, painful process). The 2005 cycle resolved through compression — prices fell 24% over four years. The 2007 nominal peak in median prices took until 2014 to recover.
The international comparison
The U.S. 5.4× ratio is high by U.S. historical standards but moderate internationally. Comparable readings: UK ~7.0×, Australia ~7.5×, Canada ~6.5×, Hong Kong ~14×, New Zealand ~6.8×. Affordability stress is now a global rich-country phenomenon, not a uniquely U.S. one.
Why the 5.4× reading is more strained than the headline suggests
Price-to-income captures price level only — it ignores the financing cost of the mortgage. The 2005 cycle peak of 4.2× was reached at mortgage rates near 5.9%; the 2024 5.4× reading is at 6.84%. Holding income fixed, the monthly payment burden in 2024 is materially worse than in 2005 even at a lower nominal price-to-income ratio than some comparable markets. A more comprehensive affordability measure — total monthly housing cost as a share of monthly income — places 2024 at roughly 40% of median household income, well above the 28% Fannie Mae underwriting guideline and the highest reading in the modern record. The price-to-income ratio is the cleanest single metric, but it understates how stretched things are once mortgage costs are included.
What this means for buyers in 2026
A buyer purchasing at the 2024 median priced-to-income reading is taking on a financial obligation that, if rates and incomes hold static, will require either price compression, mortgage refinancing into a lower rate, or income growth to feel comfortable over the long term. Historically, every reading above 4× resolved either through compression (2005 → 2011) or through a multi-year period of price stagnation while incomes grew into the level (the late 1990s). Buyers who internalize this can avoid the implicit assumption that today's price level is a permanent baseline. Affordability mean-reverts; the question is over what horizon and through which mechanism.
Related
- When was U.S. housing most affordable?
- Median U.S. home price in 2024
- How much have home prices risen since 1968?
- The rate-lock effect, explained
- Cheapest U.S. cities to buy a home
- The affordability dashboard
Sources
U.S. Census Bureau Survey of Construction; National Association of Realtors Existing Home Sales report; Freddie Mac Primary Mortgage Market Survey; National Bureau of Economic Research Business Cycle Dating Committee.