Median Income Required for Homeownership Almost Doubles Since 2020, Study Shows

Housing and Urban Development Secretary Scott Turner joined “Mornings with Maria” to discuss rising mortgage rates, reduced housing regulations, and the Trump administration’s efforts to increase affordable homebuilding.

A new Harvard University Joint Center for Housing Studies report finds that housing activity remains muted in early 2024, as high costs continue to dampen demand.

The annual “State of the Nation’s Housing” report, released Wednesday, shows existing‑home sales hovering near the lowest level of the past three decades, first reached in 2023.

Sales of new homes were relatively flat, while rental retention improved and new occupancies fell. New‑construction starts declined 1% over the past year, driven by a 7% drop in single‑family starts.

“Although supply shortages remain a major concern, depressed demand dominated the housing market over the past year,” the report noted, citing slower growth in both homeowner and renter households compared with a year ago.

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The household income needed to afford a home has nearly doubled since 2020. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)

The growth rate of homeowner households fell by half, leading to a second consecutive year of declining homeownership rates. Moreover, the year‑over‑year increase in renters during the first quarter of 2026 was less than half of the previous year’s gain.

Economic uncertainty has weighed on housing demand, with employment growth slowing from a gain of 1.5 million in 2024 to just 116,000 in 2025.

Consumer confidence dropped more than 20 percentage points in 2025 and fell further in early 2026 amid the Iran war, hitting an all‑time low in April.

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Demand for homes is suppressed by high prices. (Eric Thayer/Bloomberg/Getty Images)

“Without a job, graduates are less likely to form a new household or relocate,” the report said. “Without confidence in employment, families are less likely to move or make a major purchase like a house.”

Elevated costs and a shortage of affordable options further weaken demand, as households grapple with high home prices and interest rates.

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High mortgage rates and limited new supply have made buying a home and meeting monthly payments more challenging. (David Paul Morris/Bloomberg via Getty Images)

The report indicated that median prices for both new and existing homes exceed $400,000. Existing‑home prices have risen 54% since 2020 and now require roughly five times the median income—far above the three‑times ratio typical of the 1990s.

With mortgage rates above 6%, the monthly payment on a median‑priced home reached $3,100 in the fourth quarter of 2025, up from $1,700 in early 2020. Consequently, the income needed to afford such a payment climbed to over $120,000, compared with $66,000 in 2020.

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