Homeownership is becoming increasingly unaffordable as single-family home prices rise to nearly five times the median household income, according to a new Harvard University report.

The costs of homeownership are the highest they have been in 30 years, when Harvard’s Joint Center for Housing Studies began collecting data, according to the report. Home prices have spiked by 47% since early 2020 and 115% since 2010, with the most growth occurring in the Northeast and Midwest. 

The price-to-income ratio for homes reached 5.1 in 2022, dropping slightly to 4.9 in 2023. In the 1990s, that same ratio averaged just 3.2. 

“High home prices and interest rates have raised the costs of homebuying to historic heights, pricing out millions of potential first-time buyers, slowing homeownership growth, and exacerbating racial homeownership gaps,” the report said. “For homeownership to remain a viable and beneficial choice for U.S. households, the affordability, accessibility, and sustainability of homeownership must be improved for both current and future homeowners.”

The median price for existing homes in the United States was $389,300 in 2023, up from $271,900 in 2019. In order to afford a median-priced home in the first quarter of 2024, a household needed to earn $120,000 per year — up from $82,000 three years ago, adjusted for inflation.

“Faced with rising homeownership costs, fewer renters can afford to transition to homeownership,” the report said.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Only 14.5% of rental households nationwide had enough income to afford a median-priced home in the first quarter of 2024, according to the report. 

Rent prices have also increased, rising 26% since 2020, although rent growth has slowed significantly since 2022.

Cities where home prices have soared to at least eight times the median household income include Boulder, Colorado; Santa Fe, New Mexico; Flagstaff, Arizona; Corvallis, Oregon; and much of coastal California, according to the university’s interactive map.