The median sale prices of new homes sold in the U.S. has begun rising slightly faster than median household income in the last several months, indicating that new homes have become slightly less affordable than they were earlier this year.
Measured as the ratio of the trailing twelve month averages of monthly median new home sale prices and median household income, the median sale price of new homes sold in the U.S. has slowly risen from a low of 4.88 times median household income in April and May 2020 to a high of 4.95 times median household income in September and October 2020. The following chart shows the developing rising trend in the context of the available historical data for both data series since 1968. (Please click here to see a full-size version of the chart).
Our latest analysis of the trend for median household income, the denominator of the relative affordability ratio for new homes, is available here. Meanwhile, a up-to-date chart featuring the median and average sale prices of new homes sold in the U.S. from January 2000 through October 2020 confirms a rising trend for new homes following their rapid bottoming early in the period of the coronavirus recession.
The references section below provides access to our sources for the raw data presented in the charts above.
U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [Excel Spreadsheet]. Accessed 25 November 2020.
U.S. Census Bureau. Income, Poverty, and Health Insurance in the United States: 2018. Current Population Survey. Annual Social and Economic Supplement (ASEC). Table H-5. Race and Hispanic Origin of Householder -- Households by Median and Mean Income. [Excel Spreadsheet]. 10 September 2019.
U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 25 November 2020. Accessed: 25 November 2020.
U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 25 November 2020. Accessed: 25 November 2020.
Sentier Research. Household Income Trends: January 2000 through December 2019. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 6 February 2020. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars.]