House Prices to Income
New Data for 2024 Wages Released In October
One of the metrics we'd like to follow is a ratio of house prices to incomes.
Unfortunately most income data is released with a significantly lag, and there are always questions about which income data to use (the average total income is skewed by the income of a few people).
And for key measures of house prices - like Case-Shiller - we have indexes, not actually prices. But we can construct a ratio of the house price indexes to some measure of income.
The Census Bureau released median income data for last year (2024) in September: Income, Poverty and Health Insurance Coverage in the United States: 2024
The median household income was $83,730 in 2024, up 3.87% from $80,610 in 2023 (nominal dollars).
This graph uses the year end Case-Shiller house price index - and the nominal median household income through 2024 from the Census Bureau. 2025 median income is estimated at a 4% annual gain.
By this measure, house prices are 3% below the bubble peak, and about 9% below the recent peak.
For the second graph I decided to look at house prices and the National Average Wage Index released in October for 2024 from Social Security.
This graph shows the ratio of house price indexes divided by the National Average Wage Index (the Wage index is first divided by 1000). This uses the annual average National Case-Shiller index since 1976 (and an estimate for 2025). Note: The national wage index for 2025 is estimated.
As of 2025, house prices were well above the median historical ratio - and not far below the bubble peak.
By these measures of house prices to income, house prices are still elevated.