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Chart of the Day: Home in 1985 vs. 2022

red bar chart

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Today’s Chart of the Day comes from Realtor.com and shows the difference between the average price of homes vs. incomes. It took 3.5 years of income in 1985 versus 6.3 years in 2022. There are many reasons for this increase such as: larger homes, more regulations adding to higher costs, higher quality of construction, better financing options allowing higher loan amounts, and higher demand from an older population. However, the fact remains that there is a natural limit on how high this ratio can go, and the trajectory shows we may test that limit someday.