Average Home Prices (2023)
This article continues RubyHome's in-depth exploration of real estate facts. In this installment, we shed light on the average home prices across the nation and how they have evolved over time. Here’s a quick look at the topics we will cover in more depth.
- What Is the Average Home Price in the U.S.?
- Average Home Prices by State
- Average Home Prices Over Time
- How Affordable Are Homes?
Key Home Price Statistics
- The median home price in the United States is $422,550 in 2023.
- Hawaii ($966,572) and California ($762,981) have the highest median home prices in the nation.
- Since 1963, home prices have seen a 23x increase; or roughly 10.4% on average per year.
- As of 2023, a family would need to earn $104,016 to afford a median-priced home in the U.S.
What Is the Average Home Price in the U.S.?
Here are some key stats about the average home prices in the United States.
- According to the U.S. Census Bureau, the median home price in the U.S. in 2023 is $422,550.
- The mean price in the U.S. is slightly higher at $499,450 due to luxury properties boosting the average.
- The median listing price per square foot is $224.
- In July 2018, the median price per square foot was $144, indicating a 56% increase in value over the past 5 years.
- The median home size in the U.S. is 2,014 sq. ft.
Average Home Prices by State
Hawaii ($966,572) and California ($762,981) have the highest median home prices in the nation. West Virginia ($155,687) and Mississippi ($171,998) are the two least expensive states.
In terms of regional differences, coastal states tend to have higher median home prices, whereas midwestern states typically have lower home prices. Here’s a full list of median home prices by state in 2023, ranked from top to bottom.
| State | Median Home Price |
|---|---|
| Hawaii | $966,572 |
| California | $762,981 |
| District of Columbia | $728,227 |
| Massachusetts | $608,542 |
| Washington | $593,406 |
| Colorado | $555,300 |
| Utah | $522,488 |
| Oregon | $506,627 |
| New Jersey | $500,717 |
| New Hampshire | $467,775 |
| Montana | $447,845 |
| Idaho | $443,638 |
| Rhode Island | $442,945 |
| Nevada | $431,413 |
| Arizona | $429,910 |
| New York | $421,274 |
| Maryland | $416,643 |
| Florida | $406,896 |
| Connecticut | $401,285 |
| Vermont | $383,882 |
| Maine | $380,374 |
| Virginia | $376,931 |
| Delaware | $367,443 |
| Alaska | $364,964 |
| Wyoming | $337,102 |
| Minnesota | $336,279 |
| North Carolina | $321,447 |
| Georgia | $320,437 |
| Tennessee | $310,782 |
| Texas | $305,497 |
| South Dakota | $296,811 |
| New Mexico | $293,766 |
| South Carolina | $289,791 |
| Wisconsin | $288,596 |
| Pennsylvania | $256,842 |
| North Dakota | $255,551 |
| Nebraska | $255,447 |
| Illinois | $254,128 |
| Missouri | $239,743 |
| Michigan | $233,019 |
| Indiana | $232,390 |
| Ohio | $220,542 |
| Alabama | $220,419 |
| Kansas | $216,131 |
| Iowa | $215,458 |
| Kentucky | $201,033 |
| Louisiana | $200,947 |
| Oklahoma | $200,203 |
| Arkansas | $199,284 |
| Mississippi | $171,998 |
| West Virginia | $155,687 |
Average Home Prices Over Time
Over the past 60 years, home prices have risen drastically. If one was buying a home in 1963, one could expect to pay $18,050.
Over the past 60 years, home prices have risen faster than inflation. The average inflation rate over the past 60 years is 3.98% annualy compared to the average increase of 10.4% per year in median home prices.
The following chart shows the rise in median home prices in the U.S. from 1963 to 2023.
How Affordable Are Homes?
The affordability index established by the National Association of Realtors (NAR) gauges whether a standard family could meet the criteria for obtaining a mortgage loan on an average home.
A score of 100 means a family earning the median income has just enough money to afford a median-priced home. A score above 100 means the average family has more than enough income needed to afford a median-priced home. If the score is below 100, that means that average families would not be able to qualify for loans for median-priced homes.
In the past few years, homes have become much less affordable.
For example, in 2020 mortgage rates were around 3.17% and the median home price was around $300,200. To afford a median-priced home, a family would only need to earn $49,680. Most average families could afford homes, so the home affordability index was 169.9.
Fast forward to June 2023 and the median home price is $416,000 with mortgage rates hovering near 7%. For a family to afford a median-priced home now, they would need to earn $104,016 which is more than the actual median family income of $91,319. This results in an affordability index score of 87.8, signifying that homes are much less affordable now than they were 3 years ago.
Regionally, it’s still reasonable for median-income families in the Midwest to purchase a median-priced home. The Midwest had a home affordability index score of 113.7 as of June 2023. The West was the least affordable with a score of 64.1.
Conclusion
Looking back over the years, the journey of home prices since 1963 has been remarkable, with a significant 23-fold increase, indicating an average annual growth rate of around 10.4%.
Turning our attention to affordability, the landscape has shifted significantly in recent years. In 2023, aspiring homeowners must earn $104,016 annually to comfortably afford a median-priced home.
One thing is certain - the housing market is always influx and there are natural ebbs and flows over time.
Sources
Federal Reserve Bank of St. Louis
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