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Housing Market Historical Trends (Historical Trend Analysis: Mortgage Rates, Home Prices, and Household Income (2019-2025))
Executive Summary
This analysis examines trends in 30-year fixed mortgage rates, median home sale prices, and median household income over the past several years. Additionally, it includes an affordability analysis, comparing home prices and mortgage payments to household income.
Historical Trends
Mortgage Rates (2020-2025)
- Mortgage rates reached a historic low of 2.65% in January 2021.
- Rates began rising in early 2022, surpassing 5% by April 2022 and peaking at 7.79% in October 2023.
- Since late 2023, mortgage rates have fluctuated around 6.5% to 7.0%.
Median Home Prices (2019-2025)
- In 2019, the median home price was $327,100.
- Prices rose steadily through 2021, reaching $414,000 in October 2021.
- Prices peaked at $442,600 in October 2022, followed by fluctuations between $414,500 and $435,400 through 2024.
Median Household Income (2018-2023)
- Household income grew from $75,790 in 2018 to $81,210 in 2019.
- However, income declined slightly in 2020 ($79,560) and 2021 ($79,260).
- By 2023, income had rebounded to $80,610, but the growth has not kept pace with rising home prices.
Affordability Analysis
Mortgage Payment-to-Income Ratio (Assuming a 20% down payment, 30-year fixed loan)
|
Year |
Median Home Price |
Mortgage Rate |
Monthly Payment (Estimate) |
Median Household Income |
Payment-to-Income Ratio |
|
2020 |
$317,100 |
3.33% |
~$1,120 |
$79,560 |
16.9% |
|
2021 |
$395,200 |
2.88% |
~$1,314 |
$79,260 |
19.9% |
|
2022 |
$437,700 |
5.11% |
~$2,018 |
$77,540 |
31.2% |
|
2023 |
$435,400 |
6.73% |
~$2,252 |
$80,610 |
33.5% |
|
2024 |
$414,500 |
6.87% |
~$2,165 |
(Not Available) |
(Not Available) |
Key Insight: Housing affordability dropped significantly between 2021 and 2023. The percentage of household income required for a mortgage payment jumped from 16.9% (2020) to over 33% (2023), primarily due to rising mortgage rates.
Sources: https://fred.stlouisfed.org/series/MORTGAGE30US; https://fred.stlouisfed.org/series/MSPUS; https://fred.stlouisfed.org/series/MEHOINUSA672N
