Short answer. U.S. housing was most affordable around 1985 on a price-to-income basis, when the median existing home cost roughly 2.4× the median household income. By 2024 that ratio had widened to 5.4× — the most stretched on record.
| Year | Median Existing Price | 30-Yr Rate | Median Income | P&I / Income |
|---|---|---|---|---|
| 1971 | ~$25,200 | 7.54% | ~$10,300 | ~18% |
| 1998 | $128,400 | 6.94% | ~$38,900 | ~21% |
| 2012 | $176,600 | 3.66% | ~$51,400 | ~22% |
| 2021 | $350,300 | 2.96% | ~$70,800 | ~25% |
| 2024 | $407,500 | 6.84% | ~$80,600 | ~33% |
Measuring affordability requires combining three variables: home prices, incomes, and mortgage rates. The optimal reading across all three came in the mid-1980s after rates began to fall from their 1981 Volcker-era peak of 16.63%.
The 1985 affordability window
In 1985, the median existing-home price was $75,500 and the 30-year fixed rate was 12.43%. While the rate seems high today, the critical point is the price-to-income ratio: at roughly $31,000 in median household income, the typical home cost 2.4× annual income — a multiple that allowed many dual-income households to qualify comfortably under the 28% front-end debt-to-income rule.
Why not the 2010–2012 period?
From 2011 to 2013, mortgage rates fell to historic lows (4.45% in 2011, 3.66% in 2012) while prices were depressed by the post-crash correction — existing medians were at $166,200 in 2011. Monthly payments were extraordinarily low, making 2011–2013 arguably the most affordable period for buyers with access to credit. However, the post-2008 tightening of mortgage standards excluded many potential buyers, meaning affordability was theoretical for a large share of the population. If the metric is payment-per-dollar-of-income for creditworthy buyers, 2012–2013 wins; if the metric is income-adjusted price available to a broad population, 1985 is the benchmark.
The long trend
From 1968 (the earliest year with NAR data) through roughly 1995, the U.S. price-to-income ratio ranged between 2.4× and 3.2×. It first broke 4× around 2004 during the subprime boom and fell back to 3.5× by 2012. Since 2019 it has risen almost continuously, reaching 5.4× in 2024 — the worst reading in the 56-year series.
Sources
National Association of Realtors Existing Home Sales; U.S. Census Bureau American Community Survey median household income; Freddie Mac Primary Mortgage Market Survey.
Related
- When was U.S. housing most affordable? (overview)
- How much has the home price-to-income ratio changed?
- What caused the housing affordability crisis?
- 1985 housing market data
- More Q&A