Home Prices / Income
Selected range · January 1964 — April 2026
About this chart
The Home-Prices-to-Income Ratio compares the level of U.S. home prices with average weekly earnings for production and nonsupervisory employees in the private sector.
The home-price component measures changes in U.S. residential property values. The earnings component represents the average weekly pay received by a broad group of private-sector production and nonsupervisory employees.
The ratio therefore provides a long-term comparison between the movement of national home prices and the earnings of many private-sector workers.
The ratio rises when home prices increase faster than weekly earnings. This can happen because home prices rise, earnings grow more slowly, earnings decline, or several of these changes occur together.
A higher ratio means that home prices are relatively elevated compared with the earnings measure used in the model. It may indicate that housing values have grown more quickly than workers’ weekly pay.
The ratio falls when weekly earnings grow faster than home prices or when home prices decline relative to earnings.
A lower ratio means that home prices are relatively less elevated compared with the earnings measure. This may reflect stronger wage growth, weaker housing demand, falling home prices, or a combination of these factors.
The model does not compare the dollar price of an average home with the annual income of a typical household. The home-price input is an index, while the denominator is average weekly earnings for a defined group of private-sector employees.
The absolute ratio level therefore should not be interpreted as the number of weeks or years of income required to purchase a home. Its purpose is to measure how the relationship between home prices and weekly earnings has changed over time.
The chart compares the ratio with an estimated long-term exponential trend.
A deviation of 0% means that the ratio is equal to its estimated trend.
A positive deviation means that home prices are relatively stronger than weekly earnings compared with the model’s long-term trend.
A negative deviation means that weekly earnings are relatively stronger than home prices compared with the model’s long-term trend.
The standard-deviation zones show whether the current deviation is relatively common or historically unusual. Values farther above or below the trend represent less common historical relationships between U.S. home prices and weekly earnings.
The model can provide useful context about long-term housing affordability pressures. However, it is not a complete affordability measure because it does not directly include mortgage rates, taxes, down-payment requirements, household structure, or regional housing differences.
Limitations
- The ratio compares national home-price and household-income measures, so it does not represent affordability for a specific household, city, or property type.
- Household income does not capture differences in taxes, debt obligations, savings, wealth, or access to mortgage credit.
- The model does not include mortgage rates, down-payment requirements, property taxes, insurance, maintenance, or transaction costs, all of which materially affect housing affordability.
- National averages can conceal substantial regional differences in incomes, home prices, housing supply, and local labor-market conditions.
- Income and home-price data may be revised and can differ in frequency, timing, and methodology, which may affect the measured ratio.
- The historical average, trend, and standard-deviation zones depend on the selected sample period and model specification.
- An unusually high or low reading can persist and should not be interpreted as a complete affordability assessment, a precise valuation estimate, or a market-timing signal.
Methodology
The Home-Prices-to-Income Ratio is calculated by dividing the monthly U.S. home-price index by average weekly earnings for production and nonsupervisory private-sector employees.
The natural logarithm of the ratio is fitted to a linear monthly time trend. Converting the fitted result back into normal values produces the model’s exponential long-term trend. The percentage deviation measures how far the current ratio is above or below that trend. The standard deviation of the full percentage-deviation series is used to create the ±1σ, ±2σ and ±3σ zones around 0%. The z-score standardizes the current deviation relative to the historical variation in the percentage-deviation series. The denominator is average weekly earnings for production and nonsupervisory private-sector employees, not median household income. The model uses monthly observations beginning in January 1964.
Data sources
Monthly U.S. home-price index
Range: January 1964 to the latest available observation
Source: Robert J. Shiller, U.S. Home Prices historical data; https://shillerdata.com/
Average weekly earnings of production and nonsupervisory employees, total private, seasonally adjusted
Range: January 1964 to the latest available observation
Source: U.S. Bureau of Labor Statistics, Average Weekly Earnings of Production and Nonsupervisory Employees, Total Private [CES0500000030], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CES0500000030