Median New Home Sale Prices Falling

U.S. Median New Home Sale Price vs Median Household Income, Annual: 1999 - 2017 | Monthly: December 2000 - November 2018

Falling median new home prices and rising median household incomes are combining to improve the relative affordability of new homes sold in the U.S. The following chart shows the ratio of median new home sale prices to median household incomes since 1967.

U.S. Median New Home Sale Price vs Median Household Income, Annual: 1999 - 2017 | Monthly: December 2000 - November 2018

After peaking at 5.45 times median household income in February 2018, the ratio of median new home sale prices to median household income has fallen to a preliminary value of 5.22 in November 2018. Although this figure is still historically elevated, it does mark an improvement in the relative affordability of new homes sold in the U.S. to levels last seen in late 2014.

This trend can be considered to be the silver lining in an otherwise cloudy environment for the new home market in the United States. We'll take a closer look at what falling prices means for the real estate industry later this week.


References

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 1 February 2019.

Sentier Research. Household Income Trends: November 2018. [PDF Document]. Accessed 28 December 2018. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars.]

U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [Excel Spreadsheet]. Accessed 31 January 2019.

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