The Census Bureau released median income data for 2020 today: Income, Poverty and Health Insurance Coverage in the United States: 2020
Median household income was $67,521 in 2020, a decrease of 2.9% from the 2019 median of $69,560. This is the first statistically significant decline in median household income since 2011.
Between 2019 and 2020, the real median earnings of all workers decreased by 1.2%, while the real median earnings of full-time, year-round workers increased 6.9%.
One of the measures I like to use to evaluate house prices is Case-Shiller House Prices to Median Income. Previously I was using a 5% increase in income for 2020, however median income declined 2.9% last year - and that means house prices compared to income were higher in 2020 than I originally thought.
This graph uses the year end Case-Shiller house price index - and the nominal median household income through 2020 from the Census Bureau. 2021 median income is estimated at a 5% annual gain.
By this measure, house prices are close to the bubble peak.
However, as I noted in The Housing Conundrum:
Demographics are very favorable for home buying.
Mortgage rates are near record lows.
Lending standards have been fairly solid.
And housing inventory is near record lows.
So, by some measures, house prices seem high, but the recent price increases make sense from a supply and demand perspective.