New House Prices and Median Income
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the third factoid in a series of four factoids detailing the steady rise of home prices paired alongside housing inventories and median incomes unable to keep the same pace.
When the home building industry picked up after the Great Recession, so did the price of new homes. Before the recession in 2007, 64 percent of new homes sold for under $300,000. In 2009 at the bottom of the Recession, that number grew as high as 74 percent. Today only 45.7 percent of homes sell $300,000 and under. Since 2011, houses selling above $300,000 have steadily become the majority – up to 54.3 percent in 2017 YTD.
Since the recession, median income has been unable to keep up with the escalation of home prices. Overall, median home prices have risen 28.1 percent from 2007 to 2016 – up to $313,700. The growth of median income stalled with the recession and has slowly improved to $59,900 in 2016. According to ONS affordability data, median price paid for a home leapt 259 percent between 1997 and 2016, while earnings rose only 68 percent.
Source: U.S. Census Bureau, New Houses sold in the U.S. by Sales Price.