130 sats \ 2 replies \ @Voldemort 1 Mar \ on: U.S. Median House Prices vs. Income charts_and_numbers
There are too many nuances to draw any meaningful conclusions from this.
First, the definition of household income is poorly understood. People often hear household income and think "family income." these two thing are different, and family income is higher than household income. E.g., Take 2 people who need roommates because they can't afford to live on their own. Maybe they make 20k each in a metro area. The household income would be $40k. They would not be included in family income, however. Family income only looks at households occupied by a family. Families of size 4 have a median income > 100k, at least in 2022. Well, actually I don't know if that is true. I saw that 28 states have an median income for a family of 4 is >100k but I didn't pay attention to which states those included.
Second, median sales price of houses sold is biased as nicer houses are more likely to be sold. Especially when you consider new construction. This is demonstrated when you compare the zillow home value index with the median price of houses sold. The zillow home value index in in dec. 2022 was $333k. the median sales price of houses sold was $480k.
One could argue that the two measures in the figure are both biased so the comparison still holds. I would disagree as households, families, demographics, preferences, home features and lending regulations have drastically changed over time.
At least if it is being used in a way to argue that capitalism has failed or the american dream is dead.
Thanks for clearing that up. It really helps.
reply
Here is a pic from fred showing the data. You can really see a large separation of home prices sold and the zillow index in 2009/2010
reply