When baby boomers were buying their first homes in the 1970s and 1980s, it was not unusual to assume a double-digit interest rate on a 30-year mortgage. And yet, buying a home still seemed to be within reach for many. Today, rates are lower but home values have skyrocketed. New research shows that the gap between incomes and home prices has grown at a staggering rate over the past 50 years, creating an affordability crisis for younger generations.
A three-part report from Realty Hop focuses on housing affordability in 1970 compared to 2022, using census data on median household income and the median value of owner-occupied housing units to calculate a “Multiple of housing unaffordability” in 117 US cities. Ultimately, the report aims to find how many multiples of family income were needed to buy a house in 1970 compared to 2022.
Perhaps not surprisingly, unaffordability has increased most rapidly along the coasts (seven of the 10 cities with the worst generational housing gaps were in California) and in major tech hubs like San Francisco and Seattle.
In Seattle, for example, the median household income in 1970 was $11,037, while the median home value was $16,300. In 2022, those numbers were $169,878 and $879,900, meaning home values grew three and a half times faster than incomes. That's the sixth largest gap in the study.
Topping the list was Los Angeles, with an unaffordability multiplier of 3.73. New York's was 3.17, good for 11th place and one spot behind Miami, at 3.25.
At the other end of the spectrum, Cleveland was nearly level, with a multiplier of 1.02, while Detroit was actually more affordable for the average family in 2022 than it was in 1970 (the only such city on the list) with a multiplier of 0.74. .
To receive weekly email updates on residential real estate news, sign up here.
